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Investment Property

The document discusses the accounting treatment for various transfers of properties between different classifications. It states that transfers from investment property to owner occupied or inventory would be recorded at cost, with no gain or loss recognized. Transfers from owner occupied, inventory, or construction in progress to investment property would record any gain or loss in the profit and loss statement at the conversion date fair value.

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Jomer
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74 views14 pages

Investment Property

The document discusses the accounting treatment for various transfers of properties between different classifications. It states that transfers from investment property to owner occupied or inventory would be recorded at cost, with no gain or loss recognized. Transfers from owner occupied, inventory, or construction in progress to investment property would record any gain or loss in the profit and loss statement at the conversion date fair value.

Uploaded by

Jomer
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Transfers to and from Investment propery

Current New
Scenario Classification Valuation Classification
1 Investment property Cost model Owner occupied
2 Investment property Cost model Inventory
3 Investment property Fair value Owner occupied
4 Owner occupied Cost/ Carrying amount Investment property
5 Inventory Cost/ Carrying amount Investment property
6 Construction in progress Cost/ Carrying amount Investment property
New
Valuation Any gain or loss Where to record
Cost/ Carrying amount None N/A
Cost/ Carrying amount None N/A
Cost/ Carrying amount Yes, FV at conversion date vs. carrying amount P&L statement
Fair value Yes, FV at conversion date vs. carrying amount As part of equity
Fair value Yes, FV at conversion date vs. carrying amount P&L statement
Fair value Yes, FV at conversion date vs. carrying amount P&L statement
Initial Measurement - At cost - Jan 1, 2019 4,000,000.00
Less: Accumulated depreciation (400,000.00)
Carrying Amount - December 31, 2020 3,600,000.00
Selling price 4,500,000.00
Gain on sale 900,000.00
Year of acquisition Initial cost FV at 12/31/20 Gain/Loss in 2020 FV at 12/31/20
Property 1 2020 2,700,000.00 3,200,000.00 500,000.00 3,200,000.00
Property 2 2020 3,450,000.00 3,000,000.00 (450,000.00) 3,000,000.00
Property 3 2020 3,300,000.00 3,900,000.00 600,000.00 3,900,000.00
9,450,000.00 10,100,000.00 650,000.00 10,100,000.00
FV at 12/31/21 Gain/Loss in 2021
4,000,000.00 800,000.00
2,100,000.00 (900,000.00)
3,600,000.00 (300,000.00)
9,700,000.00 (400,000.00)
Cost Acc. Depreciation Net book value
1-Jan-20 9,000,000.00 - 9,000,000.00
31-Dec-20 9,000,000.00 300,000.00 8,700,000.00
31-Dec-21 9,000,000.00 600,000.00 8,400,000.00

Answers:
P&L 300,000.00 expense - Depreciation
SFP 8,400,000.00 carrying amount
Cost model
Cost Depreciation Acc. Depreciation Net book value
1-Jan-18 5,800,000.00 - - 5,800,000.00
31-Dec-18 5,800,000.00 145,000.00 145,000.00 5,655,000.00
31-Dec-19 5,800,000.00 145,000.00 290,000.00 5,510,000.00
31-Dec-20 5,800,000.00 145,000.00 435,000.00 5,365,000.00
31-Dec-21 5,800,000.00 145,000.00 580,000.00 5,220,000.00

Fair value model


Fair value Gain (loss)
1-Jan-18 - -
31-Dec-18 - -
31-Dec-19 - -
31-Dec-20 6,000,000.00 -
31-Dec-21 5,900,000.00 (100,000.00)

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