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Dear Chris,
How are you?
I hope you are doing well,
In regard to Investment property Could you Tell me if I am right or wrong about the following point.
We shouldn’t include the property as investment property in case of
– Future use as an investment property (IAS 16 Untill completed)
Is that mean if we are constructing the building we should treat it as non-current asset (PPE) and after completing the capitalization of all the cost and become ready for it’s intended use after that we can classified it as investment property.
is that right or wrong,Thank you in advance.
Hi,
Yes the standard is very specific in that it says that it is not IP, so we capitalise the costs as usual under IAS 16 and then when it is used as IP it will be transferred and held at this value and revalued at each reporting period with gains/losses through profit or loss.
Thanks
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