IFRS - Investment Properties

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APQIFRS
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IFRS - Investment Properties

Post by APQIFRS »

Currently using GAAP - Investment properties was recorded at cost and depreciate by its estimated useful life. The company wanted to adopt IFRS. It is a must to perform fair market valuation?
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nauman
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Re: IFRS - Investment Properties

Post by nauman »

IAS 40 allows you to carry investment properties on cost basis as well.
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JRSB
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Re: IFRS - Investment Properties

Post by JRSB »

Yes. It always seemed odd though, presumably in most cases the value is expected increase over time....
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Marek Muc
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Re: IFRS - Investment Properties

Post by Marek Muc »

Perhaps allowing these alternatives was the result of the cost vs. benefit analysis incorporated in the Framework that we discussed the other day ;)
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JRSB
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Re: IFRS - Investment Properties

Post by JRSB »

UK GAAP requires investment property at fair value. Initially there was exception for 'undue cost or effort' but then that was removed - so UK regulators feel the benefit is there for the users regardless of cost of obtaining the information.
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Marek Muc
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Re: IFRS - Investment Properties

Post by Marek Muc »

I feel the same :)
Irfan Mustafa
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Re: IFRS - Investment Properties

Post by Irfan Mustafa »

IAS 40 allows u to follow cost model. However, even in that case, u need to ascertain (but not account for) fair value (if ascertainable) of the property for disclosure purposes. So u will have to perform market valuation.
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Marek Muc
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Re: IFRS - Investment Properties

Post by Marek Muc »

that's a good point, disclosure of fair value is required even for the cost model (IAS 40.79(e))
but when it's 'just' a disclosure, a bit less of diligence is needed. I mean - in practice of course ;)
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