IFA I, Chapter 6, presentations ppt.pptx

Investment ppt

1. . Chapter six Investment Property (IAS 40)

2. Overview OBJECTIVE SCOPE DEFINITIONS CLASSIFICATION OF PROPERTY AS INVESTMENT PROPERTY OROWNER-OCCUPIED PROPERTY RECOGNITION MEASUREMENT AT RECOGNITION MEASUREMENT AFTER RECOGNITION Accounting policy Fair value model Cost model TRANSFERS DISPOSALS DISCLOSURE

3. Objective .

4. Scope The Standard shall be applied in the recognition, measurement and disclosure of investment property This Standard does not apply to: (a) biological assets related to agricultural activity and IAS 16 Property, Plant and Equipment); and (b) mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.

5. Definitions -

6. Continued

7. Continued .

8. Classification Of Property As Investment Property Or Owner-occupied Property examples of investment property : land held for long-term capital than for short-term sale in the ordinary course of business. land held for a currently undetermined future use.

9. Continued (c) a building owned by the entity (or held by the entity under a finance lease) and leased out under one or more operating leases. (d) a building that is vacant but is held to be leased out under one or more operating leases. (e) property that is being constructed or developed for future use as investment property.

10. Continued examples of items that are not investment property property intended for sale in the ordinary course of business or in the process of construction or development for such sale (IAS 2 ), owner-occupied property (IAS 16), property that is leased to another entity under a finance lease.

11. Flowchart IAS 2 Is the property for sale in the ordinary course of business? IAS 16 Is the property owner- occupied? Is the property being constructed or developed for the purposes other than future use as an investment property? the property is an investment property. Apply IAS 40 Is the property being constructed or developed for third party? IFRS 15

12. Recognition

13. Measurement At Recognition An investment property shall be measured at its cost. Transaction costs shall be included in the initial measurement.

14. Elements of cost .

15. Continued

16. Measurement After Recognition Accounting policy An entity shall choose either the fair value model or the cost model Fair value model After initial recognition, an entity that chooses the fair value model shall measure all of its investment property at fair value A gain or loss arising from a change in the fair value of investment property shall be recognized in profit or loss for the period in which it arises

17. Continued

18. Continued

19. Transfers Transfers to, or from, investment property shall be made when, and only when, there is a change in use, evidenced by: commencement of owner-occupation, for a Transfer from investment property to owner occupied property; commencement of development with a view to sale, for a transfer from investment Property to inventories;

20. Continued (c) end of owner-occupation, for a transfer from owner occupied property to investment property; or (d) commencement of an operating lease to another party, for a transfer from inventories to investment property.

21. Continued

22. Continued .

23. Continued

24. Continued .

25. Disposals .

26. Continued .

27. Disclosure An entity shall disclose: whether it applies the fair value model or the cost model. the amounts recognized in profit or loss

28. Continued (c) net gains or losses from fair value adjustments (d) transfers to and from investment property (e) the depreciation methods used (f) the useful lives or the depreciation rates used

29. End of Chapter six Thank You!!!