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Chapter 31 / Investment Property (lAS 40)
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• End of construction or development (transfer from property under construction, covered by
lAS 16, to investment propert y)
5.5.2 In cases where the fair value model is
not
used, tran sfers betwe en classifi cati ons are made
at the carry ing value: the lower of cos t and net realizable value if inventories, or cos t less accumu–
lated depreciation and impairment losses if property, plant, and equipment.
5.5.3 If owner-occu pied property is transfe rred to investment property that is to be carri ed at fair
value, then, up to the change, lAS 16 is applied. That is to say, any reva luation in fair value is
treated in acco rdance with lAS 16.
5.5.4 Tra nsfers from investment property at fair value to property, plant, and equipment shall be
at fair value, which becomes deemed cost.
5.5.5 For transfers from inventori es to investment properti es that are to be carried at fair value ,
the remeasurement to fair value is recognized in the income statement.
5.5.6 When a property under construc tion is completed and transferred to inves tme nt property to
be carried at fair value, the remeasurement to fair value is recogni zed in the income statement.
6. DISPOSALS
An investment property shall be derecognized on disposal or at the time that no benefit is expected
from future use or disposal. Any gain or loss is determined as the difference between the net dis–
posal proceed s and the carrying amount and is recogni zed in the income statement.
7. DISCLOSURES
7.1 Fair Value and Cost Model
An entity shall disclose
• Whether it applies the cost or fair value model
• If it applies the fair value model, whether and under what circumstance s property interests
held under operating leases are classified and accounted as investment property
• When classificati on is difficult, the criteria used to distinguish investment property, owner–
occupied property and property held for disposal in the ordinary course of business
• The methods used and significant assumptions made in determi ning fair value
• The extent to which fair value s are based on assessments by an independen t and qualified
valuer. If there are no such valuat ions, that fact shall be stated
• The amounts recognized in the income statement for
• Rental income from investment propert y
• Direct operating expenses that generated rental income
• Direct operating expenses that did not genera te rental income
• Cumul ative change in fair value recognized in the income statement on sale of investment
property from a pool of assets in which the cost model is used to a pool in which the fair
value model is used
• Existence and amounts of restrictions on the realizability of investment property; or for the
remittance of income and proceeds on disposal
• Contractual obligations to purchase, construct, or devel op investment property or for repairs,
maintenance, or enhancements
7.2 Fair Val ue Mode l
7.2.1 If an entity applies the fair value model , it shall also disclose a reconciliation of the opening
and clos ing carryi ng values of investment property, showing
• Additions, showing separately acquisitions, subsequent expenditure, and additions through
business combinations
• Assets classified as held for sale under IFRS 5
• Net gains or losses from fair value adjustments
• Net exchange differences arising on translation of financial statements in a different report–
ing currency