- 4 Marks
FR – April 2022 – L2 – Q2d – Conceptual Framework for Financial Reporting
Explain the definition of investment property under IAS 40 and discuss the differences between the fair value model and revaluation model for investment properties.
Question
d) The recognition, measurement, and disclosure of an Investment Property in accordance with IAS 40: Investment Property appears straightforward. However, this could get complicated when measured either under the fair value model or under the revaluation model.
Required:
i) Define Investment Property under IAS 40 and explain the rationale behind its accounting treatment. (2 marks)
ii) Explain how the treatment of an investment property carried under the fair value model differs from an owner-occupied property carried under the revaluation model. (2 marks)
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