- This topic has 3 replies, 2 voices, and was last updated 8 years ago by
.
- Posts
IAS 40 accounting for investment property says that changes in fair value i.e gain or loss should be credited or debited to income statement.Suppose as at 31/12/2008 a property had a fair value of $500,000 which becomes the carrying amount as at 01/01/2009.We are then told that this property had a fair value of $700,000 as at 31/12/2009.Kindly,explain the treatment of the changes in fair value.I’m having problems in understanding as to whether the change must be shown as other comprehensive income.
‘Suppose as at 31/12/2008 a property had a fair value of $500,000 ….’
Is this an investment property? Your post does not make it clear!
If it IS an investment property, the IAS tells us “that changes in fair value i.e gain or loss should be credited or debited to income statement”
So what’s not clear?
If it had wanted you to take the gain or loss to comprehensive income the IAS would have said “that changes in fair value i.e gain or loss should be credited or debited to statement of other comprehensive income”
My appologies for not mentioning that its an investment property.
What’s not clear is I thought the change will give rise to a revaluation surplus which must be shown to the statement of other comprehensive income.Help me understand this clearly ?
If the change in value arises on the date of re-classification from ppe to investment property then, yes, that change will go through revaluation reserve and be shown in other comprehensive income
But that’s not what you post asked! No where in your original post do you say that 1 January, 2009 is the date of re-classification!
I answer the questions as I see them and if you don’t give me full information then …
- You must be logged in to reply to this topic.