IAS 40 Investment Property now allows a property held under an operating lease to be accounted for as an investment property subject to certain conditions. IAS40 Investment Property was issued in April 2000 to regulate the accounting for investment property. An accounting treatment for investment properties different from that for other types of land and buildings is called for because the objective for holding investment properties make them more in the nature of investments than usual properties which are consumed in the operations of the business. This standard was revised in December 2003.
1.Investment property is defined as land or building held to earn rentals or for capital appreciation or both, rather than for use in an enterprise or for sale in the ordinary course of business. A field of land purchased for its investment potential, and a building acquired under a finance lease for its investment potential are both the examples of investment properties.
2. A property interest that is held by a lessee under an operating lease may be classified and accounted for as investment property if, and only if (1) the property would otherwise meet the definition of an investment property; (2) the operating lease is accounted for as if it were a finance lease; and (3) the lessee uses the fair value model for the asset recognized. If a property interest held under a lease is classified as investment property, the item accounted for at fair value is that interest and not the underlying property.
3. Recognition
IAS40 requires recognition of investment properties as assets when they meet the normal recognition criteria – future economic benefits will flow to the enterprise and the cost of the property can be measured reliably.
4. Initial Measurement
An investment property should initially be measured at cost, including transaction costs.
5. Measurement Subsequent to Initial Recognition
IAS40 gives an enterprise the choice of adopting a cost-based policy or a fair value based policy for its investment properties. The chosen policy must be applied to all the investment properties belonging to the enterprise.
6. Under the cost-based approach, investment properties are treated like other properties, using the cost model in IAS16 Property, Plant and Equipment – that is, cost less accumulated depreciation and any accumulated impairment losses. IAS40 requires disclosure of fair value when the cost-based approach is used. |
发表于 2012-2-23 17:09:42
