IAS 40 - Additional Notes

* owner-occupied property (OOP) *Transfers of investment proper

*examples of investment property (IP) 1. IP -> OOP (owner occupation)
1. Land 2. IP -> Inventory (development w
2. Building - operating lease 3. OOP -> IP (end of owner occup
3. Property being constructed for future use 4. OOP -> IP (lease out)

*Partly investment and partly owner occupied *Measurement of transfers

-should be accounted for separately
@ COST MODEL
*Property leased to an affiliate measurement = carrying amount
on the perspective of consolidated financial statements - OOP
on the perspective of individual entity - IP
@ FAIR VALUE MODEL
*Initial measurement - cost 1. IP @ fair value -> OOP
*Subsequent measurement fair value = cost for accounting th

IAS 40 - Sample Illustration 2. OOP -> IP @ fair value

carrying amount -> fair value
The construction was completed and placed in service on January 1, 2020. changes = revaluation of PPE

The cost of the construction of the shopping malll was P100,000,000. 3. Inventory -> IP @ fair value
carrying amount -> fair value
The useful life of the shopping mall is 10 years and residual value is P10,000,000. changes = remeasurement in P/L

31-Dec-20 120,000,000 4. IP under construction & compl

31-Dec-21 125,000,000
31-Dec-22 115,000,000
*DERECOGNITION OF INVESTME
The entity decided to use cost model. a. On disposal
b. When IP is permanently withd
Investment Property 100,000,000 c. When no future economic ben
Cash 100,000,000
*Disposal
Acquisition cost 100,000,000 carrying amount of IP
Residual value ( (10,000,000) (net proceeds of IP)
Depreciable amount 90,000,000 gain or loss from disposal of IP
Annual depreciation ( 9,000,000)
*DISCLOSURES
Depreciation ( 9,000,000) 1. model adopted or used in mea
Accumulated Depreciation ( 9,000,000) 2. amount of rental income & its
3. restictions on IP
4. contractual obligations related
The entity decided to use fair value model.
Investment Property 100,000,000
 rs of investment property
OOP (owner occupation)
nventory (development with a view to sale)
> IP (end of owner occupation)
> IP (lease out)

rement of transfers

ment = carrying amount

VALUE MODEL
air value -> OOP
e = cost for accounting the OOP

> IP @ fair value

amount -> fair value
= revaluation of PPE

ory -> IP @ fair value

amount -> fair value
= remeasurement in P/L

er construction & completed -> @ fair value

OGNITION OF INVESTMENT PROPERTY

IP is permanently withdrawn from use

no future economic benefits are expected from the IP

amount of IP

oss from disposal of IP

adopted or used in measuring IP

nt of rental income & its expenses

ctual obligations related to IP

 Cash 100,000,000

Investment Property 20,000,000

Gain from change in fair value 20,000,000

2021

Investment Property 5,000,000

Gain from change in fair value 5,000,000

2022
Loss from change in fair value 10,000,000
Investment property 10,000,000