Please provide summary on Ind AS 40 - Investment Property
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Please provide summary on Ind AS 40 - Investment Property
The objective of this Standard is to prescribe the accounting treatment for investment
property and related disclosure requirements.
This Standard shall be applied in the recognition, measurement and disclosure of
investment property.
Among other things, this Standard applies to the measurement in a lesseeโs financial statements of investment property interests held under a lease accounted for as a finance lease and to the measurement in a lessorโs financial statements of investment property provided to a lessee under an operating lease. This Standard does not deal with matters covered in Ind AS 17, Leases, including:
(a) classification of leases as finance leases or operating leases;
(b) recognition of lease income from investment property
(c) measurement in a lesseeโs financial statements of property interests held under a lease accounted for as an operating lease;
(d) measurement in a lessorโs financial statements of its net investment in a finance lease
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Certain properties are classified as investment properties for financial reporting purposes in accordance with Ind AS 40, โInvestment propertyโ, as the characteristics of these properties differ significantly from owner-occupied properties. It is the current value of such properties and changes to those values that are relevant to users of financial statements.
Investment property is property (land or a building, or part of a building or both) held by an entity to earn rentals and/or for capital appreciation. This category includes such property in the course of construction or development. Any other properties are accounted for as property, plant and equipment (PPE) or inventory in accordance with the following:
1.Ind AS 16, โProperty, plant and equipmentโ, if they are held for use in the production or supply of goods or services
2.Ind AS 2, โInventoriesโ, as inventory, if they are held for sale in the ordinary course of business.
Scope
2 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 lesseeโs financial
statements of investment property interests held under a lease accounted for as a finance
lease and to the measurement in a lessorโs financial statements of investment property
provided to a lessee under an operating lease. This Standard does not deal with matters
covered in Ind AS 17, Leases, including:
(a) classification of leases as finance leases or operating leases;
(b) recognition of lease income from investment property (see also Ind AS 115,
Revenue from Contracts with Customers);
(c) measurement in a lesseeโs financial statements of property interests held under a
lease accounted for as an operating lease;
(d) measurement in a lessorโs financial statements of its net investment in a finance
lease;
(e) accounting for sale and leaseback transactions; and
(f) disclosure about finance leases and operating leases.
4 This Standard does not apply to:
(a) biological assets related to agricultural activity (see Ind AS 41, Agriculture and
Ind AS 16 Property, Plant and Equipment); and
(b) mineral rights and mineral reserves such as oil, natural gas and similar nonregenerative
resources.
Please provide summary on Ind AS 40 - Investment Property
The objective of this Standard is to prescribe the accounting treatment for investment
property and related disclosure requirements.
This Standard shall be applied in the recognition, measurement and disclosure of
investment property.
Among other things, this Standard applies to the measurement in a lesseeโs financial statements of investment property interests held under a lease accounted for as a finance lease and to the measurement in a lessorโs financial statements of investment property provided to a lessee under an operating lease. This Standard does not deal with matters covered in Ind AS 17, Leases, including:
(a) classification of leases as finance leases or operating leases;
(b) recognition of lease income from investment property
(c) measurement in a lesseeโs financial statements of property interests held under a lease accounted for as an operating lease;
(d) measurement in a lessorโs financial statements of its net investment in a finance lease;
(e) accounting for sale and leaseback transactions; and
(f) disclosure about finance leases and operating leases.
Dear Friend
> Ind AS 40 - Investment Property
Certain properties are classified as investment properties for financial reporting purposes in accordance with Ind AS 40, โInvestment propertyโ, as the characteristics of these properties differ significantly from owner-occupied properties. It is the current value of such properties and changes to those values that are relevant to users of financial statements.
Investment property is property (land or a building, or part of a building or both) held by an entity to earn rentals and/or for capital appreciation. This category includes such property in the course of construction or development. Any other properties are accounted for as property, plant and equipment (PPE) or inventory in accordance with the following:
1. Ind AS 16, โProperty, plant and equipmentโ, if they are held for use in the production or supply of goods or services
2. Ind AS 2, โInventoriesโ, as inventory, if they are held for sale in the ordinary course of business.
Initial measurement of an investment property will be at cost. Subsequent measurement of investment properties to be carried at cost less accumulated depreciation and any accumulated impairment losses. However, the fair value of the investment property is disclosed in the notes.
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