IFRS - Investment Properties
IFRS - Investment Properties
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?
Re: IFRS - Investment Properties
IAS 40 allows you to carry investment properties on cost basis as well.
Re: IFRS - Investment Properties
Yes. It always seemed odd though, presumably in most cases the value is expected increase over time....
Re: IFRS - Investment Properties
Perhaps allowing these alternatives was the result of the cost vs. benefit analysis incorporated in the Framework that we discussed the other day
Re: IFRS - Investment Properties
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.
Re: IFRS - Investment Properties
I feel the same
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Re: IFRS - Investment Properties
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.
Re: IFRS - Investment Properties
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
but when it's 'just' a disclosure, a bit less of diligence is needed. I mean - in practice of course