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whether investment property ( ias 40) is depreciated under following methods?
cost model?
fair value model?i read is past exam papers that it is not depreciated under fair value method.
so plz tell me why it is depreciated under cost model?A deep question …. and a shallow answer! Because that’s what the IAS tells us to do:-
“After initial recognition, investment property is accounted for in accordance with the cost model as set out in IAS 16 Property, Plant and Equipment – cost less accumulated depreciation and less accumulated impairment losses.”
whereas, for the fair value model:-
“Investment property is remeasured at fair value, which is the amount for which the property could be exchanged between knowledgeable, willing parties in an arm’s length transaction. Gains or losses arising from changes in the fair value of investment property must be included in net profit or loss for the period in which it arises.”
Ours not to reason why…. ours but to do, or die!
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