Investment property

Learning objectives

• Define investment property (land or a building held to earn rentals or for capital appreciation) and distinguish it from owner-occupied property.L1, L2

Normative references

• IAS 40 §5Definitions: carrying amount, cost, fair value, investment property (land or a building held to earn rentals or for capital appreciation, including through a right-of-use asset) and owner-occupied property (held for use in the production or supply of goods or services or for administrative purposes).
• IAS 40 §7Characteristic of investment property: it generates cash flows largely independently of the other assets held by the entity, which distinguishes it from owner-occupied property.

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

2 questions

• Which of these descriptions matches the definition of an investment property?L1
• Four colleagues comment on the definition of investment property. Which of the following statements is incorrect?L2