Investment Property: Presented By: Minoza, Vanessa Lou Judilla, Jasper Quiros, Chaznay

PAS 40
INVESTMENT
PROPERTY
Presented by:
Minoza, Vanessa Lou
Judilla, Jasper
Quiros, Chaznay
PAS 40 INVESTMENT PROPERTY
CONTENT
1. PAS 40 2. Analysis of AFS
Objectives Ayala Land Inc. and
Scope Subsidiaries
Recognition
Measurement
Derecognition
Disclosure
PAS 40
INVESTMENT
PROPERTY
OBJECTIVES
Prescribe the Accounting treatment

for Investment property and
Related disclosure requirements
SCOPE
Recognition
Measurement
Disclosure of Investment Property
RECOGNITION PRINCIPLES
Assets
a. probable future economic benefits
b. cost can be measured reliably
All its investment property cost at the time they are incurred.
Cost are recognised in profit or loss as incurred.
Costs of day‑to‑day servicing are primarily the cost of labour and

consumables, and may include the cost of minor parts.
Purpose: the ‘repairs and maintenance’ of the property.

MEASUREMENT PRINCIPLES
Measurement at recognition
Measurement at cost including transaction cost
Purchase Price
Property Transfer Taxes
Deferred cash price equivalent (interest expense)
Direct Expenditure
Legal Fees
Cost when construction complete
Measurement after recognition
Fair Value Model (R.C)
Recognise gain or loss in P&L of each period

Change from FV to cost model not appropriate
Cost Model (D.R)
Disclosure FV (professional valuation recommended)

Rebuttable presumption that FV can be measured or
residual value must be zero
Transfer (C.E.D.O)
Commence operating lease to 3rd party

End of construction
Development for sale
Owner-occupation
(fair value at date of change in use)
DERECOGNITION PRINCIPLES
An investment property is derecognised
(eliminated from the statement of financial position) when it is:
disposed of; or
permanently withdrawn from use and
no future economic benefits are expected from its disposal.

Disposals
net disposal proceeds- carrying amount=profit/loss in period of disposal
IAS 16 for sale and leaseback
Recognise compensation for impairment or loss in profit & loss when receivable
DISCLOSURE REQUIREMENTS
Fair Value and Cost Model
Model
1. whether fair value or cost model applied

2. reasons for classifying property under operating lease as IP.
Value
Criteria to distinguish owner-occupied IP

Methods and assumptions to calculate fair value
Market Evidence to support fair value
Whether or not a professional valuation was obtain
Obligation
Restrictions on realisability (existence and amounts)

Contractual obligations to develop, repair, maintain or enhance
Amounts in Profits or Loss
Direct operating expenses relating to rental income

Cumulative change in fair alue from sale of asset at cost to fair value pools
Direct operating expenses not related to rental income
Rental Income
Fair Value Model
Reconciliation between carrying amounts at beginning and end of period

Reconciliation between valuation obtained and valuation included in financial
statements (if adjusted)
Cost Model
Description of investment property

Reason why fair value cannot be determined
Range of estimates in which fair value is likely to fall
Disposal of investment property not carried at fair value (carrying amount and
recognised gain or loss)
ASSESSMENT
AYALA LAND INC.

AND SUBSIDIARIES
Assets (Current)
(a) Expected to be realized or intended to be sold or consumed in normal operating

cycle;
(b) Held primarily for the purpose of trading;
(c) Expected to be realized within 12 months after reporting date; or
(d) Cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after reporting date.
ASSESSMENT PAS 40 INVESTMENT PROPERTY
The Group presents the assets in the consilidated statement of

financial position based on current/noncurrent classification in which
the 2 particulars in recognition under assets are being recognized and
measured reliably.
Investment Properties
comprise completed property and property under construction or under

redevelopment that are held to earn rentals or capital appreciation or both and that
are not occupied by the companies in the Group.
Repairs and Maintenance of the property:

only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the items can be measured reliably. All other repairs and
maintenance are charged against current operations as inccured.
The Group has started borrowing costs to capitalized its property and
equipment and investment properties under construction. When the
Investment property is under construction and related activities to prepare
the property for its intended use are complete, and the property is ready for
occupation or under the condition as intended by the Group
In accordance with IFRS 16,
A lessee may elect not to assess whether a rent concession from a lessor is a lease
modification if it meets all of the following criteria:
(a) The rent concession is a direct consequence of COVID-19;
(b) The change in lease payments results in a revised lease consideration that is
substantially the same as, or less than, the lease consideration immediately
preceding the change;
In accordance with IFRS 16,
(c) Any reduction in lease payments affects only payments originally due on or
before June 30,2022; and
(d) There is no substantive change to other terms and conditions of the lease.
The Group applies judgment when assessing whether the rent concessions
granted is considered a lease modification under IFRS 16.
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date.
The fair value measurement is based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
The fair value of an asset or a liability is measured using the assumptions that
market participants would use when pricing the asset or liability, assuming that
market participants act in their economic best interest.
A fair value measurement of a non-fictional asset takes into account a market

participant's ability to generate economic benefits by using the asset in its highest
and best use or ny selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the

circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the
use of unobservable inputs.
Cost Includes:
Land cost
Land improvement cost
Amounts paid to contractors for construction and development
Planning and design costs, costs of site preparation, professional fees,

property transfer taxes, construction overheads and other related costs.
The Group uses the cost model in measuring investment properties since
this represents the historical value of the properties subsequent to initial
recognition.
Investment properties, except for land, are carried at cost less

accumulated depreciation and amortization and any impairment in
residual value. Land is carried at cost less any impairment in value.
A transfer is made to investment property when there is a change in use,

evidenced by ending of owner-occupation, commencement of an operating
lease to another party or ending of construction or development.
A transfer between investment property, owner-occupied property and

inventory does not change the carrying amount of the property transferred
nor does it change the cost of that property for measurement or disclosure
purposes.
The Group engage under transfer in commencing an operation of lease to

the third parties, end of construction, development of sale and owner
occupation.
Investment properties are derecognized when either they have been

disposed of, or when the investment property is permanently withdrawn from
use and no future economic benefit is expected from its disposal.
Any gain or loss on the retirement or disposal of an investment property is

recognized in the consolidated statement of income in the year of retirement
or disposal.
Gains or losses arising from derecognition of an intangible asset are

measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the consolidated
statement of income.
In Accordance to PAS 40, The Group discloses the fair values of its
investment properties. The Group engages independent valuation
specialist to assess the fair values as at December 31, 2021 and 2020.
Investment properties, except for land, are carried at cost less

accumulated depreciation and amortization and any impairment in
residual value. Land is carried at cost less any impairment in value.
The Group uses the cost model in measuring investment properties since
this represents the historical value of the properties subsequent to initial
recognition
Depreciation of investment properties are computed using the straight-line method

over the estimated useful lives of the assets. The estimated useful lives and the
depreciation method are reviewed periodically to ensure that the period and method
of depreciation are consistent with the expected pattern of economic benefits from
items of investment properties.
The Group reviewed their required disclosures about about these

presumptions, the most sensitive results of the impairment test, notably
those that have the biggest impact on the calculation of the value of
recoverable assets, including right-of-use assets, equipment, and property.
The Group also follow the provided mandatory disclosure requirements
given by the SEC Memorandum Circulars.
PRESENTORS
Vanessa Miñoza Jasper Judilla
Chaznay Quiros
THANK
YOU
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PAS 40

Prescribe the Accounting treatment

Cost are recognised in profit or loss as incurred.

Costs of day‑to‑day servicing are primarily the cost of labour and

Purpose: the ‘repairs and maintenance’ of the property.

Measurement at cost including transaction cost

Measurement after recognition

Fair Value Model (R.C)

Recognise gain or loss in P&L of each period

Measurement after recognition

Cost Model (D.R)

Disclosure FV (professional valuation recommended)

Measurement after recognition

Commence operating lease to 3rd party

An investment property is derecognised

(eliminated from the statement of financial position) when it is:

permanently withdrawn from use and

no future economic benefits are expected from its disposal.

net disposal proceeds- carrying amount=profit/loss in period of disposal

IAS 16 for sale and leaseback

Fair Value and Cost Model

1. whether fair value or cost model applied

Criteria to distinguish owner-occupied IP

Restrictions on realisability (existence and amounts)

Amounts in Profits or Loss

Direct operating expenses relating to rental income

Fair Value Model

Reconciliation between carrying amounts at beginning and end of period

Description of investment property

AYALA LAND INC.

(a) Expected to be realized or intended to be sold or consumed in normal operating

(b) Held primarily for the purpose of trading;

(c) Expected to be realized within 12 months after reporting date; or

The Group presents the assets in the consilidated statement of

comprise completed property and property under construction or under

Repairs and Maintenance of the property:

In accordance with IFRS 16,

(a) The rent concession is a direct consequence of COVID-19;

In accordance with IFRS 16,

A fair value measurement of a non-fictional asset takes into account a market

The Group uses valuation techniques that are appropriate in the

Land improvement cost

Amounts paid to contractors for construction and development

Planning and design costs, costs of site preparation, professional fees,

Investment properties, except for land, are carried at cost less

A transfer is made to investment property when there is a change in use,

A transfer between investment property, owner-occupied property and

The Group engage under transfer in commencing an operation of lease to

Investment properties are derecognized when either they have been

Any gain or loss on the retirement or disposal of an investment property is

Gains or losses arising from derecognition of an intangible asset are

Investment properties, except for land, are carried at cost less

Depreciation of investment properties are computed using the straight-line method

The Group reviewed their required disclosures about about these

Vanessa Miñoza Jasper Judilla

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