Monday, April 8, 2019
Investment Property Essay Example for Free
Investment Property EssayThe accusative of this Standard is to prescribe the accounting treatment for investment attribute and related disclosure requirements. Investment property is property (land or a buildingor part of a buildingor both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for (a) use in the production or supply of goods or services or for administrative purposes or (b) sale in the ordinary course of business. A property inte hiatus that is held by a lessee under an operating lease may be classified and accounted for as investment property provided that (a) the rest of the definition of investment property is met (b) the operating lease is accounted for as if it were a finance lease in accordance with IAS 17 Leases and (c) the lessee uses the sporty value model set out in this Standard for the asset prize.Investment property shall be recognised as an asset when, and only when (a) it is probable that the future scotch benefits that are associated with the investment property will flow to the entity and (b) the price of the investment property can be measured reliably. An investment property shall be measured initially at its cost. Transaction costs shall be included in the initial measurement.The initial cost of a property interest held under a lease and classified as an investment property shall be as prescribed for a finance lease by paragraph 20 of IAS 17, ie the asset shall be recognised at the discredit of the fair value of the property and the present value of the minimum lease payments. An equivalent amount shall be recognised as a liability in accordance with that same paragraph. The Standard permits entities to choose any (a) a fair value model, under which an investment property is measured, after initial measurement, at fair value with changes in fair value recognised in profit or loss or (b) a cost model.The cost model is specified in IAS 16 and r equires an investment property to be measured after initial measurement at depreciated cost (less any accumulated impairment losses). An entity that chooses the cost model discloses the fair value of its investment property. Fair value is the price that would be received to plow an asset or paid to transfer a liability in an orderly transaction in the midst of market participants at the measurement date.An investment property shall be derecognised (eliminated from the statement of financial position) on presidential term or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. Gains or losses arising from the retirement or disposal of investment property shall be persistent as the difference between the net disposal proceeds and the carrying amount of the asset and shall be recognised in profit or loss (unless IAS 17 requires otherwise on a sale and leaseback) in the period of the retirement or disposal.