- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Hello.
Leasehold hold property- at valuation 1 October 2007 $50M
The leasehold property has a remaining life of 20 years at 1 Oct 2007. The company’s policy is to revalue its property at each reporting year end and at 30 Sep 2008, it was valued at $43M.
-The answer has accounting for this transaction as per IAS 16.
-My issue is why IAS 40 has not been used due to the fact that it is a ‘ Leasehold hold property’.Thanks.
Hi,
It is owner occupied property and therefore treated under IAS 16. Leasehold does not mean that we are looking to hold the property for investment purposes.
Property that we own can either be bought as freehold or leasehold, which from a FR perspective and IAS 16 is not really relevant. Freehold means that we legally own the building and the land, whereas leasehold means that we own the right to use the property for a fixed period of time, which is usually a considerable period of time, but somebody else owns the land itself that the property is built upon. Flats/apartments are usually leasehold and houses are usually freehold.
Thanks
- You must be logged in to reply to this topic.