A company has a a four similar office blocks. it has decided to house all the staff in one block and renting out the vacant blocks (3 blocks). How can we treat the office block? as owner occupied or the 3 blocks as investment property and the 1 block owner occupied? The fair value less costs to sell the blocks is a single amount. Thanks
Ask the Tutor ACCA FR
IAS 40; INVESTMENT PROPERTY
Hi,
They should be split out and then we'd use IFRS 13 to work out the fair value of each of the three IPs, likely using a level 3 input.
The single office block would be treated as PPE, cost less accumulated depreciation.
Thanks
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