Accounting for Investment Property

IAS 40
Initial recognition is at cost, which includes expenditures incurred in making the asset ready for use.

After initial recognition of the asset, company can choose to record all investment properties at either historical cost or fair value. If the fair value cannot be determined reliably, use historical cost.
Annual revaluations are required in order to determine fair value. Fair value should be determined with respect to future rental income expected to arise on the property.

Back to “Finance and Accounting Tutorials”