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INVESTMENT PROPERTY

Definition:

According to MFRS 140, Investment Property is property (land or building or part of building or both) held (by the owner or by the lessee under a finance lease) to earn rental or for capital appreciation or both.

Owner-occupied properties and those held for sale in the ordinary course of business do not qualify as an investment property.

Example of Investment Property:

• Land held for long-term capital appreciation rather than for short-term sales in the ordinary course of business.
• Land held for undetermined future use.
• A building owned (or held under finance lease) and leased out under operating lease.
• A building that is vacant but is held to be leased out under operating lease; and
• Property being constructed or developed for future use as investment property.

Recognition:

Investment Property should be recognized as an asset when, and only when it is probable that future economic benefits associated with the Investment Property will flow to the entity and the cost of Investment Property can be measured reliably.