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Dear Sir,
I understand the definition of IAS40 regarding investment property is:
(1) A property (land or building – or part of a building – or both)
(2) held (by the owner or by the lessee as a right to use asset)
(3) To earn rentals or for capital appreciation or both“earn rentals” means the Company would offer the lease of the property under operating lease. Is it right as in the financial lease, the Company would derecognize the asset and recognize net investment in the lease.
That’s absolutely correct.
(Almost all property leases are OL, because you tend to lease an office block for 5 years, but the life of the asset is perhaps 50 years)
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