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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Capex treatment for investment property
Hello,
I have a couple of questions in relation to capex from a viewpoint of a lessor of investment properties (commercial assets (offices) leased to tenants).
1. What is the treatment of capex? Is it
Dr Investment property
Cr Cash/Payable
And is there depreciation?
2. Is a Capex accrual required at year end – for works that have been completed but not yet invoiced. If yes, is the accounting entry
Dr Investment Property – capex
Cr Payable
3. Is a Capex accrual required at year end – for works which are a lease committment by the lessor to the tenant, but have not yet been completed. If yes, Is the accounting entry the same as for question 2?
Thank you.
IAS 40 covers accounting for investment property but this is not examinable in Paper FA.