Property leased within the group

Learning objectives

• Analyse the classification of a property leased to another group entity in the separate financial statements and in the consolidated financial statements.L3, L4

Normative references

• IAS 40 §15Property owned by an entity and leased to its parent or another subsidiary that occupies it: from the group's perspective it is owner-occupied and is therefore not investment property in the consolidated financial statements; if it meets the definition in para. 5, the lessor treats it as investment property in its individual financial statements.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Elmora, a subsidiary of the Norvane group, holds a building that it leases to another group company, Norvane Services, which carries on its business there. Which classification is consistent with the rule?L4