Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Reader Interactions

Comments

  2. Briefly explain to me how the treatment of of investment property carried under the fair value model differs from an owner occupied property carried under revaluation model

    • Investment property under IAS 40
      1.) No depreciation of asset
      2.) Any revaluation goes to SP or L (not OCI)
      3.) Recognised at fair value

      Owner Property at fair value is treated using IAS16:
      1.) Revalued each year
      2.) Depreciation is charged using straight line or reducing balance
      3.)Revaluation goes to OCI

  3. haaai sir, it will be my second attempt this time and the only problem i am having is in standard questions which kinda makes hardship for me while solving them.

    so any effective way to have a grip on standard and its questions please.

    awaiting for your kind suggestion,

    Thanks

  4. sir,….in your notes for june 2014 exam of this chapter on page 141,…for the ..start of operating lease is (investment property – inventory) but in the video here is (inventory-investment property)…?? ..why is it different?

    thanks

      • assets should be transferred into or out of investment property when there is a change in use, for example:
        • owner occupation (investment property -TNCA)
        • development with a view to sell (investment property- inventory)
        • end of owner occupation (TNCA- investment property)
        • start of operating lease (investment property- inventory)
        • end of construction or development (assets in the course of construction investment property)

        on page 141 of June 2014 exam notes…… 🙂

      • Hmmm – if it WAS in investment property and has now been leased out under an operating lease then, yes, it should come out of investment property and be shown as a separate asset. The correct adjustment is to take it out of investment property and add it into inventory – so it looks like the lecture is correct

        Ok?

      • A property that is leased to a third party under a finance lease is not within the definition of IAS 40.However A property that is leased out to a third party is within the scope of investment property . Pls correct me if I am wrong.

      • A property that is leased to a third party under a finance lease is not within the definition of IAS 40.However A property that is leased out under operating lease to a third party is within the scope of investment property . Pls correct me if I am wrong.

      • Dear sir,

        For the start of the operating lease, the lecture says that the asset should be moved from the inventory and to the investment property. And, in the comment above, you say that if the asset is classified as an investment property then under operating lease should be moved to inventory.

        1) Why do we move it from investment property to inventory? Wouldn’t it be an investment property if its leased under operating lease?

        2) Why inventory? Shouldn’t it be TNCA?

  5. suppose ppe is being converted to investment property. the cost of the ppe was 12,000 but the carrying value is now 8,000. the fair value of the asset is now 13,000. can u pls help me with the double entry.

Leave a Reply