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INVESTMENT PROPERTY
- ONLY applicable to land and building
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Examples of Investment PropertyRecognition
Derecognition
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1. Land
for long-term capital appreciation; for currently undetermined use
1) probable future economic benefits
1) on disposal
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2. Building
LEASED OUT under operating lease
2) cost of property can be measured reliably
2) IP is permanently withdrawn
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3. Property
being constructed or developed for future use
3) NO future economic benefits are expected
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Initial Measurement
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NOT Considered Investment Property
- @ cost
Purchase Price + Directly Attributable Cost
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1. Owner Occupied Property - used in operations and admin purposes
Cost Excluded:
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2. Property
1) Start up cost, E - necessary for intended use
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- OCCUPIED by employees (whether pays rent or not)
2) Operating losses incurred before IP achieves planned level of occupancy
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- held for sale under OCB
3) Abnormal losses in constructing or developing property
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- being constructed or developed on behalf of 3rd parties
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Subsequent Measurement
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ISSUESGR: FV Model
MTM, changes in FV → P/L
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1) Under Party Investment and Partly Owner Occupied
XPN: If cannot be measured reliably: Cost Model
Cost - Accu. Dep - Accu Impairement Loss = CA
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GR: If such portion can be sold or leased out seperately - ACCOUNT SEPERATELY
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XPN: Cannot be sold seperately
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a) Insignificant portion is held for manuf/admin purposes: INVESTMENT
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b) Significant portion is held for manuf/admin purposes: OWNER-OCCUPIED
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2) Property leased to an Affiliate
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GR: From perspective of individual entity: INVESTMENT
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XPN: From perspective of the group as a whole (Consolidated FS): OWNER-OCCUPIED
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3) Transfer between IP, PPE, and Inventory
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- only happens when there is change in the purpose/use of property
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a) Under Cost Model
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- Cost or CA do not change
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Buildingxx
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Accu. Dep - Building Held as IPxx
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Building Held as IPxx
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Accu. Dep - Buildingxx
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JE for IP to PPE
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