Measurement at fair value

Learning objectives

• Measure investment property at fair value at the reporting date, without depreciation.L2, L3
• Calculate, from the case data, the amount relating to measurement at fair value and justify the basis of calculation.L2, L3
• Record the entry relating to measurement at fair value and state its effect on the financial statements.L2, L3

Normative references

• IAS 40 §33Fair value model: after initial recognition, all investment property is measured at fair value, except in the cases described in para. 53.

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

3 questions

• An entity applies the fair value model. How is an investment property measured after initial recognition?L2
• Ravène applies the fair value model. Its investment property was carried at {opening_carrying_amount} at the start of the period; at the reporting date, its fair value is {closing_fair_value}. There were no acquisitions or disposals. Record the closing entry.L3
• Sorel measures its investment property portfolio at fair value. Opening carrying amount: {opening_carrying_amount}. During the period, it acquires a property for {acquisitions} and sells another whose carrying amount was {disposals_at_carrying_amount}. The fair value of the portfolio at the reporting date is {closing_fair_value}. Calculate the fair value gain for the period.L3