Recognition criteria

Learning objectives

• Apply the recognition criteria (probable future economic benefits, cost measured reliably) to investment property.L1, L2

Normative references

• IAS 40 §16Recognition of owned investment property: it is recognised as an asset if, and only if, it is probable that the future economic benefits associated with it will flow to the entity and its cost can be measured reliably.

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

2 questions

• It is enough for the cost of an investment property to be measured reliably for it to be recognised as an asset.L1
• An accountant reviews four situations against the recognition criteria for an investment property. Which of the conclusions is incorrect?L2