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Investment Property IAS40

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Investment Property IAS40

  • This topic has 5 replies, 3 voices, and was last updated 11 years ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • November 12, 2013 at 11:15 am #145607
    Lilit
    Member
    • Topics: 8
    • Replies: 11
    • ☆

    Please assist. I can not get this part of the standard.
    A property interest that is held by a lessee under an operating lease may be classified and accounted for as an investment property, if and only if the property otherwise meet the definition of an investment property and the lessee uses IAS 40 fail value model. A property interest held under a lease and classified as an investment property shall be accounted as if it were a finance lease.
    I could not understand the interrelation of finance lease, operating lease and investment property. It seems very mixed for me.
    Can you, please, explain this description in more available form?
    Thank you!

    November 12, 2013 at 4:53 pm #145680
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    Even though it may appear to be an operating lease, if the lessee has sublet it and is holding it for the long term, then it should be treated as a finance lease

    November 13, 2013 at 4:38 am #145762
    Lilit
    Member
    • Topics: 8
    • Replies: 11
    • ☆

    Dear Mike,
    Thank you!
    So clear and simple:)

    November 13, 2013 at 6:43 am #145772
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    You’re welcome

    December 11, 2013 at 10:50 am #152357
    Baker
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    Hey,, Lilit !!
    As per your depicted post what I believe is and what my experience says it like as you depicted that its an operating lease, if it has a sublet and that to which is holding it for a long term then its termed as a finance lease or else not,,
    I hope this works for you,,
    https://www.kevinbradleyrealtor.com/

    December 12, 2013 at 7:30 pm #152754
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    Hey Baker – it didn’t work for me! There used to be a game show on UK television where the game show host would say “Rearrange the following words into a well known phrase or saying”

    That was my initial reaction when I read your post!

    :-))

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