Reconciliation under the fair value model

Learning objectives

• Prepare the reconciliation between the carrying amounts at the beginning and end of the period (additions, fair value changes, transfers, disposals).L2, L3

Normative references

• IAS 40 §76Fair value model: reconciliation between the carrying amounts at the beginning and end of the period (additions, fair value changes, transfers, disposals).
• IAS 40 §77Valuation obtained that is adjusted significantly for the purpose of the financial statements (for example, to avoid double counting, para. 50): reconciliation between the valuation obtained and the adjusted valuation, showing separately the lease liabilities added back and any other significant adjustments.
• IAS 40 §78In the exceptional cases in para. 53 in which an investment property is measured using the cost model, the reconciliation required by para. 76 shows its amounts separately from those of other investment property; the entity also discloses a description of the property, why fair value cannot be measured reliably, if possible the range of estimates within which fair value is highly likely to lie and, on disposal, the fact of the disposal, the carrying amount at the time of sale and the gain or loss recognised.

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

1 question

• For its reconciliation of carrying amounts under the fair value model, Tolvane notes: opening 10,000,000; acquisitions 2,000,000; disposals (at carrying amount) 1,500,000; net fair value gain 800,000; transfers from owner-occupied property 400,000 (case data). What closing carrying amount does the reconciliation show?L3