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Forensic Accounting

IAS 40 vs IAS 16


Under IAS40 the standard stated that if a land is held for undecided use, then it should be classified as Investment Property. Then what about "Buildings eg Condominium/High rise" held for undecided use(Vacant)? Should it be classified under IAS 16 or IAS 40 ? since the standard is ambiguous about this area.

asked Dec 9, 2016 in IAS 40 - Investment Property by anonymous

1 Answer

0 votes

Only LAND held for undetermined future use will fall under investment property. IAS 40 believes that buildings can not be held for undetermined future use. Usually, the future use of a building is known. It is incorrect to classify all assets other than IP under IAS 40 to be falling under IAS 16  (condominium/high rise).

For example: A property that is held for sale in the ordinary course of business (E.g. Buildings - Condominium/High rise) are inventory under IAS 2. 
 

answered Dec 10, 2016 by Shivangi Level 4 Member (7,570 points)



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