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aliahmed1994
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A parent leases an office building to a subsidiary. In which financial statements will the property appear as investment property?
answer: The property will appear as an investment property in the parent company accounts. In the consolidated accounts it will be treated as an owner occupied building (as it’s occupied by a group company) and will be accounted for under IAS 16 – Property, Plant and Equipment.
My question is was it a finance lease or an operating lease?
P2-D2
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Hi,
We’d need more information to determine whether it is an operating or finance lease in the lessor’s (parent’s) books. I’d have thought that it would be a finance lease if the subsidiary is recognising the asset.
Thanks
aliahmed1994
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