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Hello Mike
please let me know what is the difference between IAS 40 investment property and IFRS 5 non current assets held for sale.
i understand the treatment but cant understand why we treat assets held for sale in ifrs 5 differently.
in ias 40 we have property that we have capital appreciation and rental purposes. how is this different from ifrs 5
Hi,
The two standards are both totally different.
If we have an investment property then we have no immediate intention to sell it, we are just waiting for it to increase in value before we then think about any possible sale. IFRS 5 is not relevant hear as we are not selling it.
IFRS 5 specifically deals with a non-current asset where we have made the decision to sell it by the reporting date.
Hope this helps clear up any confusion.
Hello Mike, in case we’re going to sell investment property – do we present it under the requirements of IFRS 5? (we still measure it under IAS 40 requirements?)
And do I understand correctly that at the moment of taking the sale decision the fair value is adjusted to the selling price?
Thanks!Hi,
If the IP is held under the fair value model then the measurement rules of IFRS 5 do not apply. They do if held under the cost model. This is a small point that I wouldn’t stress too much about.
We only measure the NCA-HFS to fair value if it is held under the revaluation model per IAS 16. This point is much more important.
Thanks
But when sale decision for investment property is taken – is it an evidence of adjustment of fair value of investment property to the selling price? Thx!
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