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Investment property is land or a building ‘held to earn rentals or for capital
appreciation or both’ (IAS 40, para 5) – DEFINATION ACCORDING TO IAS 40Property, plant and equipment are tangible items that: are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and. are expected to be used during more than one period – DEFINATION ACCORDING TO IAS 16
DOUBTS – Both the defination includes that the word rentals So if a propety is purchased to earn rentals then is it classified as Proprty Plant Equipment or as investment property & if it is classified under any of these why isn’t it classified under the other as well since both include the word rentals?
Hi,
IP held under a lease would be land and buildings say that we held for investment purposes, away essentially from our normal course of business.
PPE under a lease could still be land and buildings but it is not part of our investment strategy and is part of our normal course of business.
Thanks
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