Section 3500: Investment Property
International Accounting Standard 40
Investment Property
1. First version of IAS 40
"Investment Property" issued in April 2000
2. Revision
Revised in December 2003
[U.S. GAAP Codification Topic]
970 Real estate - general
972 Real estate - common interest realty associations
974 Real estate - real estate investment trusts
976 Real estate - retail land
978 Real estate - time-sharing activities
3. Property
Land, Building, Land and building
4. Owner-occupied property
Property held for the following:
(1) use of production of goods or services
(2) use in supply of goods or services
(3) administrative purposes
5. Investment Property includes:
(1) Property held to earn rentals
(2) Property held for capital appreciation
6. Investment Property does not include:
(1) Owner-occupied property
(2) Property for sale in ordinary course of business
7. Measurement at Initial Recognition, IAS 40.20
(1) Investment property is measured at cost
(2) Transaction costs are included in the cost
8. Measurement After Initial Recognition, IAS 40.30
Measured using one of the following models:
(1) Cost model
(2) Fair value model
9. Cost model, IAS 40.56
For cost model, apply IAS 16
For investment property held for sale, apply IFRS 5
10. Fair Value Model
Investment property is valued at fair value, IAS 40.33
Gain or loss: Change in fair value of investment property
--> is recognised in profit or loss, IAS 40.35
11. If fair value cannot be reliably determined, IAS 40.53
(1) Use cost model
(2) Residual value = 0
12. Property interest held by (1) and (2), IAS 40.6, 34
(1) owner
(2) lessee under finance lease
--> can be measured using
--> either cost model or fair value model
13. Property interest held by (3)
(3) lessee under operating lease
--> should be measured using
--> fair value model only
--> Cost model is not allowed, IAS 40.6, 34
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