Investment Property

Investment Property – land or building held by the owner for undetermined future use, capital appreciation,
or earn rentals.

What if: Partly PPE – Partly Investment Property

1. Can be sold/rented out separately – value of the property should be split up to PPE and Investment
Property.
2. Cannot be sold/rented out separately – PPE portion is significant, the whole property is accounted as PPE.
IP portion is significant, the whole property is accounted as IP.
3. Ancillary Services – if insignificant, account as investment property. However, if it is significant account as
PPE.
Investment Property includes the following:
1. Land held for capital appreciation or undetermined future use
2. Land held for potential plant site
3. Land or building being leased out under operating lease
4. Land or building leased out to subsidiary in the separate financial statement
5. Land or building under construction or being developed as investment property

Initial Measurement:
Cost = Purchase Price + Directly Attributable Cost
Subsequent Measurement:
Cost Model = Cost – Accumulated Depreciation – Accumulated Impairment Loss
Fair Value Model = Fair Value

Cost Model Fair Value Model

Initial Measurement Same as PPE Same as PPE
Subsequent Measurement Cost Fair Value = Carrying Amount
Less: Accumulated Depreciation
Accumulated Impairment
Carrying Amount
Depreciation With Without
Impairment With Without
Unrealize gains/losses Without With
Reclassification of Investment Property:
Fair Value Model

Cost Model