Hi,
If a company X (landlord) lease a property (finance lease) to company Y (intermediate lessor) (finance lease) which in turn, lease the same property to company Z.
Should company X classify the property as an investment property? is that mandatory?
Same for the company Y.
Thanks
Investment perperty (IAS40) classification in a sublease
Re: Investment perperty (IAS40) classification in a sublease
Assets leased out under finance leases are derecognised, so they cannot be classified as investment property.
Re: Investment perperty (IAS40) classification in a sublease
To continue on Marek's point, sayY lesaes out to Z under an operating lease, and it meets the definition of investment property under IAS 40 (e.g. earning rental income), classificaiton as investment property is mandatory, and not a choice.