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Educational Material on Ind AS 40 Investment Property

Educational Material on Ind AS 40 Investment Property

Ind AS 40 Investment Property : Ind AS 40 Investment Property applies to the accounting for property (land and/or buildings) held to earn rentals or for capital appreciation (or both). Investment properties are initially measured at cost and, with some exceptions. may be subsequently measured using a cost model or fair value model, with changes in the fair value under the fair value model being recognised in profit or loss. Ind AS 40 was reissued in December 2003 and applies to annual periods beginning on or after 1 January 2005.

History of Ind AS 40

DateDevelopmentComments
October 1984Exposure Draft E26 Accounting for Investments published 
March 1986Ind AS 25 Accounting for Investments issuedOperative for financial statements covering periods beginning on or after 1 January 1987
July 1999Exposure Draft E64 Investment Property publishedComment deadline 31 October 1999
April 2000 Ind AS 40 Investment Property (2000) issued
(Supersedes Ind AS 25 with respect to investment property)
Operative for annual financial statements covering periods beginning on or after 1 January 2001
May 2002Exposure Draft Improvements to International Accounting Standards (2000) publishedComment deadline 16 September 2002
18 December 2003Ind AS 40 Investment Property (2003) issuedEffective for annual periods beginning on or after 1 January 2005
22 May 2008Amended by Annual Improvements to IFRSs 2007 (include property under construction or development for future use within scope)Effective for annual periods beginning on or after 1 January 2009
12 December 2013Amended by Annual Improvements to IFRSs 2011–2013 Cycle (interrelationship between IFRS 3 and Ind AS 40)Effective for annual periods beginning on or after 1 July 2014

Educational Material on Ind AS 40 Investment Property

Ind AS 40 Investment Property : Investment property Investment Property is property (land or building or part of a building or both) held to earn rentals or for capital appreciation or both. Rather than for –  Use in the production or supply  Sale in the ordinary course of business Definitions.  Classification of Property Investment property – Land or building, or part of a building, or both, held by the owner or the lessee under a finance lease to earn rentals and/or for capital appreciation, rather than for: use in production or supply of goods and services or use in administrative purposes or sale in the ordinary course of business.

The following terms are used in this Standard with the meanings specified:

Carrying amount is the amount at which an asset is recognised in the balance sheet. Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other Ind ASs, eg Ind AS 102, Sharebased Payment. 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. (See Ind AS 113, Fair Value Measurement). Investment property is property (land or a building—or part of a building—or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for:

(a) use in the production or supply of goods or services or for administrative purposes; or

(b) sale in the ordinary course of business.

Owner-occupied property is property held (by the owner or by the lessee under a finance lease) for use in the production or supply of goods or services or for administrative purposes.

Objective of Ind AS 40 

The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.

Scope of Ind AS 40 

This Standard shall be applied in the recognition, measurement and disclosure of investment property. 3 Among other things, this Standard applies to the measurement in a lessee’s financial statements of investment property interests held under a lease accounted for as a finance lease and to the measurement in a lessor’s financial statements of investment property provided to a lessee under an operating lease.

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Educational Material on Ind AS 40 Investment Property 

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Educational Material on Ind AS 40 Investment Property

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