45The best evidence of fair value is given by current prices in an active market for similar property in the same location and condition and subject to similar lease and other contracts.
How do you determine the fair value of an investment property?
Fair value is the price at which the property could be exchanged between knowledgeable, willing parties in an arm’s length transaction, without deducting transaction costs (see IFRS 13). Under the cost model, investment property is measured at cost less accumulated depreciation and any accumulated impairment losses.
Why is it that the fair value of the investment property should be disclosed?
When the cost model is used, the fair value of investment property should also be disclosed. … an explanation as to why fair values cannot be determined reliably. if possible, the range within which the property’s fair value is likely to lie.
Which disclosure must be made when the cost model is used for investment property?
(e) For the investment property under cost model, the entity should disclose: Depreciation Method.
How do you calculate the capital value of a property?
Capital Value is simple to calculate it’s the net annual rent divided by the Net Initial Yield. This can also be expressed as Rent multiplied by Years Purchase, where Years Purchase is the inverse of the yield. Then you have to deduct Purchasers Costs.
What is fair value through profit or loss?
“Fair value through profit or loss” means that at each balance sheet date the asset or liability is re-measured to fair value and any movement in that fair value is taken directly to the income statement.
Is an investment in subsidiary a financial asset?
Investments in equity instruments issued by other entities, however, are financial assets. … For example, investments in subsidiaries are accounted for under IFRS 3, Business Combinations, and employers’ assets and liabilities under employee benefit plans, which are accounted for under IAS 19, Employee Benefits.
What is the difference between PPE and investment property?
In Error 1 above, we noted that the definition of PPE includes tangible items held for ‘rental to others’ and that investment property is ‘land or a building – or a part of a building – or both’. … This includes ‘owner occupied property’, which is defined in IAS 40, but which is accounted for under IAS 16.
What is the best evidence of fair value less cost to sell?
The best evidence of an assets fair value less cost to sell is a price in a binding sale agreement in an arm’s length transaction, adjusted for incremental costs that are directly attributable to the disposal of the asset.