Wiley Interpretation and Application of IFRS Standards

12 INVESTMENT PROPERTY

• Introduction
• Definitions of Terms
• Identification
  • • Apportioning property between investment property and owner-occupied property
    • Property leased to a subsidiary or a parent company
    • Interrelationship between IFRS 3 and IAS 40
• Recognition and Measurement
  • Recognition
    • Subsequent expenditures
    • Fair value vs. cost model
    • Fair value model
    • Inability to measure fair value reliably
    • Cost model
    • Transfers to or from investment property
    • Disposal and retirement of investment property
• Presentation and Disclosure
  • • Presentation
    • Disclosure
• Examples of Financial Statement Disclosures
• US GAAP Comparison

INTRODUCTION

IAS 40 is not a specialised industry standard. IAS 40 applies to the accounting treatment for investment property and related disclosure requirements. Determining whether a property is investment property depends on the use of the property and the type of entity that holds the property. Investment properties are initially measured at cost and, with some exceptions, may be subsequently measured using a cost model or fair value model, with changes in the fair value under the fair value model being recognised in profit or loss.

An investment in property (land and/or buildings) held with the intention of earning rental income 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 ...