Phase IX - INVESTMENT PROPERTY
1 . Introduction. Rental properties is house (land or maybe a building – or component to a building – or perhaps both) held to generate rentals or perhaps for capital appreciation or both, rather than for:
1 ) use in the availability or flow of goods or services or perhaps for management purposes; or perhaps 2 . sales in the regular course of business.
These properties will be distinguished by owner-occupied homes which make cash runs that are immediately attributable to the normal operation with the agency. Investment property generates money flows which might be largely in addition to the other property of the agency because they are merely held to earn leases or intended for capital appreciation or equally.
2 . Scope. This Chapter shall apply to accounting for rental properties including the dimension in a lessee's financial statements of investment property interests organised under a lease accounted for as a finance rent and to the measurement in an owner's economical statements of investment property presented to a lessee under a great operating lease contract. The following topics are not included because these will be protected under the Chapter on Rents:
a. Classification of leases while finance or operating rents; b. Recognition of rental revenue via investment property; c. Measurement within a lessee's monetary statements of property passions held under a lease made up as an operating lease contract; d. Measurement in a lessor's financial transactions of the net investments in a finance lease; at the. Accounting on the market and leaseback transactions; and
f. Disclosure about financial and functioning leases.
Yet , this Chapter shall not apply at the following:
a. Biological resources related to gardening activity; and b. Vitamin rights and mineral reserves such as essential oil, natural gas and similar non-regenerative resources.
Listed below are examples of rental properties and are as a result within the opportunity of this Part:
a. terrain held for long-term capital appreciation rather than for immediate sale; b. land held for a currently undetermined foreseeable future use;
c. a building owned or operated by the confirming enterprise (or held by reporting venture under a financial lease) and leased away under a number of operating leases; and d. a building that is vacant but can be held to get leased away under one or more operating leases.
The following are examples of items that are generally not investment property and are therefore outside the scope on this Chapter:
a. house held for sale in the ordinary span of operations or perhaps in the process of construction or perhaps development for such sale; b. real estate being created or created on behalf of businesses; c. owner-occupied property, including:
1 ) property held for upcoming use while owner-occupied real estate; 2 . property held to get future development and future use as owner-occupied home; 3. real estate occupied by employees; and
4. owner-occupied property expecting disposal;
d. property that is getting constructed or developed pertaining to future employ as rental properties; e. property that is rented to another organization under a fund lease; and f. property held for use in the production or perhaps supply of services or goods or for administrative functions;
3. Definitions. The following terms are used in this Chapter with the meanings specified:
a. Carrying amount is the volume at which a property is recognized in the statement of financial situation after deducting any built up depreciation and accumulated impairment losses on it. b. Expense is the amount of money or money equivalents paid or the good value of other thought given to get an asset during the time of its obtain or structure. c. Exchange transactions happen to be transactions in which one organization receives property or solutions, or offers liabilities...