2019 Specimen paper, Q1 (a) investment property, incorrect classification

Because that's where IAS 40 says it goes! So every year, the entries for the increase in fair value will be Dr IP Cr Profit or loss (the opposite for a decrease). This means that the IP is shown in SoFP at FV - there is no depreciation. The cost model for IP is the same as for PPE under IAS 16. The only gain will be on disposal. But there would be nothing to stop management from changing policy from cost model to FV model - but it couldn't then switch back again.