IAS 40Chapter 6Lesson 1
The policy choice: fair value or cost
Step 1 of 7Learning objectives
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After entry, the entity chooses between the fair value model and the cost model and applies it to all its investment property; change is restricted and a category option exists for linked liabilities.
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Learning objectives
- Explain that the model choice is a permitted accounting policy, not an imposed one.
- Compare the effect of the two models on the statement of financial position and profit or loss.
- Describe the conditions for a change of policy.
- Place the category option for linked liabilities.