CERTYNEX IFRS ACADEMY

Lunvane stops occupying a building, carrying amount 4,000,000 under IAS 16, and leases it to third parties (change in use evidenced). It measures its investment property at fair value, which is 3,700,000 at that date. The building has never been revalued and no revaluation surplus exists (case data). How is the 300,000 difference treated?

As a revaluation decrease under IAS 16, therefore recognised in profit or loss for lack of a surplus to offset.

As an increase, recognised in other comprehensive income.

As an additional cost, added to the carrying amount of the building.

As a deferred income, spread over the remaining life of the building.