Chapter 12INVESTMENT PROPERTY

  1. INTRODUCTION
  2. DEFINITIONS OF TERMS
  3. IDENTIFICATION
    1. Apportioning property between investment property and owner-occupied property
    2. Property leased to a subsidiary or a parent company
    3. Property interest held under an operating lease
  4. RECOGNITION AND MEASUREMENT
      1. Recognition and initial cost
      2. Subsequent expenditures
      3. Fair value vs. cost models
      4. Fair value
      5. Inability to measure fair value reliably
      6. Transfers to or from investment property
      7. Disposal and retirement of investment property
    1. Deferred Tax
  5. DISCLOSURES
    1. Disclosure requirements
  6. EXAMPLES OF FINANCIAL STATEMENT DISCLOSURES
  7. US GAAP COMPARISON

INTRODUCTION

An investment in real estate held with the intention of earning rentals or for capital appreciation or both, is described as an investment property. An investment property is capable of generating cash flows independently of other assets held by the entity. Investment property is sometimes referred to as being a “passive” investment, to distinguish it from actively managed property such as plant assets, the use of which is integrated with the rest of the entity's operations. This characteristic is what distinguishes investment property from owner-occupied property, which is property held by the entity or a lessee under a finance lease, for use in its business (i.e., for use in production or supply of goods or services or for administrative purposes).

Revised IAS 40, effective in 2005, for the first time permits property interests held in the form of ...

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