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Chapter 2

IAS 40 Investment Property

6.1 Definition

Investment property is land and/or a building held for rental income
and/or capital appreciation, rather than for use by the entity or for sale
in the ordinary course of business

6.2 IAS 40 Choices

Fair value
Cost model model

Initial cost less accumulated Revalued to fair value
depreciation as per IAS 16 each year

6.3 Cost model

The cost model for investment property is the same as for property held under IAS
16, with depreciation charged as an expense in the statement of profit or loss each
year.

6.4 Fair value model

Investment property under the fair value model is accounted for differently to property
under the IAS 16 revaluation model:

 investment property is revalued to fair value at the end of each year

 any gain or loss is taken to the statement of profit or loss, rather than other
comprehensive income

 no depreciation is charged.

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