{"id":2377,"date":"2024-07-31T19:22:50","date_gmt":"2024-08-01T01:22:50","guid":{"rendered":"https:\/\/anepsaglobal.com\/?p=2377"},"modified":"2025-03-25T13:22:22","modified_gmt":"2025-03-25T19:22:22","slug":"norma-internacional-contabilidad-nic-40","status":"publish","type":"post","link":"https:\/\/anepsaglobal.com\/en\/finance\/norma-internacional-contabilidad-nic-40\/","title":{"rendered":"International Accounting Standard 40 \u2013 IAS 40 \u2013 Investment Property \u2013 REAL ESTATE INVESTMENT"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"2377\" class=\"elementor elementor-2377\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-18bfbf4 e-flex e-con-boxed e-con e-parent\" data-id=\"18bfbf4\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-b502677 elementor-widget elementor-widget-spacer\" data-id=\"b502677\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-45b4c2f1 e-flex e-con-boxed e-con e-parent\" data-id=\"45b4c2f1\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t<div class=\"elementor-element elementor-element-4b3e2b34 e-con-full e-flex e-con e-child\" data-id=\"4b3e2b34\" data-element_type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1c31c520 elementor-widget elementor-widget-heading\" data-id=\"1c31c520\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-default\">International Accounting Standard 40 - Investment Properties - REAL ESTATE INVESTMENT<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cb3612b elementor-widget elementor-widget-spacer\" data-id=\"cb3612b\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-248ba33d e-con-full e-flex e-con e-child\" data-id=\"248ba33d\" data-element_type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-9c3c257 elementor-toc--minimized-on-tablet elementor-widget elementor-widget-table-of-contents\" data-id=\"9c3c257\" data-element_type=\"widget\" data-settings=\"{&quot;headings_by_tags&quot;:[&quot;h2&quot;],&quot;exclude_headings_by_selector&quot;:[],&quot;min_height&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:0,&quot;sizes&quot;:[]},&quot;marker_view&quot;:&quot;numbers&quot;,&quot;no_headings_message&quot;:&quot;No headings were found on this page.&quot;,&quot;minimize_box&quot;:&quot;yes&quot;,&quot;minimized_on&quot;:&quot;tablet&quot;,&quot;hierarchical_view&quot;:&quot;yes&quot;,&quot;min_height_tablet&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;min_height_mobile&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]}}\" data-widget_type=\"table-of-contents.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-toc__header\">\n\t\t\t\t\t\t<h4 class=\"elementor-toc__header-title\">\n\t\t\t\tindex\t\t\t<\/h4>\n\t\t\t\t\t\t\t\t\t\t<div class=\"elementor-toc__toggle-button elementor-toc__toggle-button--expand\" role=\"button\" tabindex=\"0\" aria-controls=\"elementor-toc__9c3c257\" aria-expanded=\"true\" aria-label=\"Open table of contents\" data-no-translation-aria-label=\"\"><i aria-hidden=\"true\" class=\"fas fa-chevron-down\"><\/i><\/div>\n\t\t\t\t<div class=\"elementor-toc__toggle-button elementor-toc__toggle-button--collapse\" role=\"button\" tabindex=\"0\" aria-controls=\"elementor-toc__9c3c257\" aria-expanded=\"true\" aria-label=\"Close table of contents\" data-no-translation-aria-label=\"\"><i aria-hidden=\"true\" class=\"fas fa-chevron-up\"><\/i><\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<div id=\"elementor-toc__9c3c257\" class=\"elementor-toc__body\">\n\t\t\t<div class=\"elementor-toc__spinner-container\">\n\t\t\t\t<i class=\"elementor-toc__spinner eicon-animation-spin eicon-loading\" aria-hidden=\"true\"><\/i>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-56c1f4fd e-con-full e-flex e-con e-child\" data-id=\"56c1f4fd\" data-element_type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-18429e8b elementor-widget elementor-widget-image\" data-id=\"18429e8b\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"722\" height=\"481\" src=\"https:\/\/anepsaglobal.com\/wp-content\/uploads\/2024\/07\/nic-40.jpg\" class=\"attachment-large size-large wp-image-3769\" alt=\"nic 40\" srcset=\"https:\/\/anepsaglobal.com\/wp-content\/uploads\/2024\/07\/nic-40.jpg 722w, https:\/\/anepsaglobal.com\/wp-content\/uploads\/2024\/07\/nic-40-300x200.jpg 300w, https:\/\/anepsaglobal.com\/wp-content\/uploads\/2024\/07\/nic-40-18x12.jpg 18w\" sizes=\"(max-width: 722px) 100vw, 722px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-ce3e0a8 e-flex e-con-boxed e-con e-parent\" data-id=\"ce3e0a8\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2ff844c elementor-widget elementor-widget-spacer\" data-id=\"2ff844c\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-703d0ca e-flex e-con-boxed e-con e-parent\" data-id=\"703d0ca\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-213df62 elementor-widget elementor-widget-heading\" data-id=\"213df62\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What is the objective of nic-40?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ffefb47 elementor-widget elementor-widget-text-editor\" data-id=\"ffefb47\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The objective of IAS 40 is to prescribe the accounting treatment for investment property and its associated disclosure requirements.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-18ea6ea e-flex e-con-boxed e-con e-parent\" data-id=\"18ea6ea\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7fd841a elementor-widget elementor-widget-spacer\" data-id=\"7fd841a\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1375d5e e-flex e-con-boxed e-con e-parent\" data-id=\"1375d5e\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5822896 elementor-widget elementor-widget-heading\" data-id=\"5822896\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What is the range of the nic-40?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3e9392e elementor-widget elementor-widget-text-editor\" data-id=\"3e9392e\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">IAS 40 should be applied in the recognition, measurement and disclosure of investment property.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">IAS 40 deals with the measurement, in a lessee&#039;s financial statements, of investment property held under a finance lease and with the measurement, in a lessor&#039;s financial statements, of investment property leased under an operating lease.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">IAS 40 does not apply to biological assets attached to land and related to agricultural activity IAS 41.<\/span><\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-90a6ec7 e-flex e-con-boxed e-con e-parent\" data-id=\"90a6ec7\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3a6c5f4 elementor-widget elementor-widget-spacer\" data-id=\"3a6c5f4\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-a216061 e-flex e-con-boxed e-con e-parent\" data-id=\"a216061\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4011f2e elementor-widget elementor-widget-heading\" data-id=\"4011f2e\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Utility Definitions<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a8556c9 elementor-widget elementor-widget-text-editor\" data-id=\"a8556c9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<ul><li><b><i>Investment Properties<\/i><\/b><span style=\"font-weight: 400;\"> are property (land or a building, in whole or in part, or both) held (by the owner or by a lessee under a finance lease) to earn rentals or capital gains, or both, rather than for:<\/span><\/li><\/ul><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(a) its use in the production or supply of goods or services or for administrative purposes; or for<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) its sale in the ordinary course of business.<\/span><\/p><p>\u00a0<\/p><ul><li><b><i>Owner-occupied properties<\/i><\/b><span style=\"font-weight: 400;\"> are properties held (by the owner or by a lessee who has agreed to a financial lease) for use in the production or supply of goods or services, or for administrative purposes.<\/span><\/li><\/ul><p>\u00a0<\/p><ul><li><b><i>Fair value<\/i><\/b><span style=\"font-weight: 400;\"> It is the amount for which an asset can be exchanged between an interested and duly informed buyer and seller who carry out a free transaction.<\/span><\/li><\/ul><p>\u00a0<\/p><ul><li><b><i>Cost<\/i><\/b><span style=\"font-weight: 400;\"> It is the amount of cash or cash equivalents paid, or the fair value of the consideration given, to purchase an asset at the time of its acquisition or construction by the company.<\/span><\/li><\/ul><p>\u00a0<\/p><ul><li><b><i>Book value<\/i><\/b><span style=\"font-weight: 400;\"> is the amount for which an asset is recognized on the balance sheet.<\/span><\/li><\/ul><p><br \/><br \/><span style=\"font-weight: 400;\">The<\/span><span style=\"font-weight: 400;\">Investment property is held to earn rentals, capital gains or both. Therefore, investment property generates cash flows independently of other assets owned by the enterprise. This distinguishes investment property from owner-occupied property. The production or supply of goods or services (or the use of property for administrative purposes) generates cash flows that are not attributable merely to the property but to other assets used in the production or supply process. IAS 16\u00a0<\/span><i><span style=\"font-weight: 400;\">Property, Plant and Equipment<\/span><\/i><span style=\"font-weight: 400;\">, applies to owner-occupied properties.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-0c6c283 e-flex e-con-boxed e-con e-parent\" data-id=\"0c6c283\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-8230199 elementor-widget elementor-widget-spacer\" data-id=\"8230199\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-76ea740 e-flex e-con-boxed e-con e-parent\" data-id=\"76ea740\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2a7fb9e elementor-widget elementor-widget-heading\" data-id=\"2a7fb9e\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Investment Property Examples<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6295dc7 elementor-widget elementor-widget-text-editor\" data-id=\"6295dc7\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">(a) Land held for long-term capital gains and not for short-term sale in the ordinary course of business operations;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) Land held for an undetermined future use (if the business has not determined whether the land will be used as owner-occupied property or sold in the short term, in the ordinary course of business operations, such land is considered to be held for capital gain);<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(c) A building owned by the reporting company (or a building obtained through a finance lease) and leased by the reporting company through one or more operating leases; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(d) A building that is vacant and will be leased through one or more operating leases.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-3dc186e e-flex e-con-boxed e-con e-parent\" data-id=\"3dc186e\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-50d1a7d elementor-widget elementor-widget-spacer\" data-id=\"50d1a7d\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-cd8900d e-flex e-con-boxed e-con e-parent\" data-id=\"cd8900d\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-aaf21d2 elementor-widget elementor-widget-heading\" data-id=\"aaf21d2\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Examples of items that are not investment property and therefore do not fall within the scope of IAS 40<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f6226b2 elementor-widget elementor-widget-text-editor\" data-id=\"f6226b2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">(a) property held for sale in the ordinary course of business, or under construction or development with a view to such sale (see IAS 2 Inventories), for example, property acquired solely for disposal in the near future or for development and resale;<\/span><\/p><p><span style=\"font-weight: 400;\">(b) properties that are being constructed or improved on behalf of others (see IAS 11 Construction Contracts);<\/span><\/p><p><span style=\"font-weight: 400;\">(c) owner-occupied property (see IAS 16 Property, Plant and Equipment), including (among others) property held for future use as owner-occupied, property held for future construction or development and subsequent use as owner-occupied, employee-occupied property (whether or not rented at market value) and owner-occupied property awaiting disposal; and<\/span><\/p><p><span style=\"font-weight: 400;\">(d) properties that are being constructed or improved for future use as investment property. IAS 16 applies to such properties until construction or development is completed, at which time they become investment property and are therefore subject to this Standard. However, this Standard does apply to existing investment property that is being further improved for future use as investment property (see paragraph 52).<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">Certain properties include a portion held to earn rentals or capital gains and a portion used in the production or supply of goods or services, or for administrative purposes. If these portions can be sold separately (or placed separately under a finance lease), the company accounts for them separately as well. If these portions cannot be sold separately, the property qualifies as investment property only if only a minor portion is used for the production or supply of goods or services, or for administrative purposes.<\/span><\/p><p><span style=\"font-weight: 400;\">In certain cases, the company provides ancillary services to the occupants of a company&#039;s property. The company will treat such property as investment property if the services are an insignificant component of the contract. An example might be the security and maintenance services provided by the owner of a building to the tenants occupying the building.<\/span><\/p><p><span style=\"font-weight: 400;\">In other cases, the services provided are a more significant component. For example, if a company owns and operates a hotel, the services provided to guests are a significant component of the contract taken as a whole. Therefore, an owner-managed hotel is an owner-occupied property and not an investment property.<\/span><\/p><p><span style=\"font-weight: 400;\">It may be difficult to determine whether ancillary services are significant enough to cause the property to not qualify as investment property. For example, a hotel owner sometimes transfers certain responsibilities to third parties under a management agreement. The terms of such an agreement can vary widely. At one end of the spectrum of possibilities, the owner&#039;s position may be essentially that of a passive investor. At the other end of the spectrum, the owner may simply have outsourced certain day-to-day management functions to third parties, but retained significant exposure to variations in the cash flows generated by the hotel&#039;s operations.<\/span><\/p><p><span style=\"font-weight: 400;\">Judgment is required in determining whether a property qualifies as investment property. An enterprise shall develop criteria for exercising such judgment in a consistent manner, in accordance with the definition of investment property and the related guidance in paragraphs 5 through 11. Paragraph 66(a) requires an enterprise to disclose such criteria when classification is difficult.<\/span><\/p><p><span style=\"font-weight: 400;\">Under IAS 17 Leases, a lessee shall not capitalise property held under an operating lease arrangement. Therefore, a lessee shall not treat its investment in such property as investment property.<\/span><\/p><p><span style=\"font-weight: 400;\">In some cases, an enterprise owns property that it leases to and is occupied by the parent or another subsidiary in the same group. This property cannot be classified as investment property in the consolidated financial statements that include both enterprises because it is owner-occupied property from the perspective of the group as a whole. However, from the perspective of the individual enterprise that owns it, the property is investment property if it meets the definition in paragraph 4. Therefore, the lessor will treat the property as investment property in its individual financial statements.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-5ef7dd5 e-flex e-con-boxed e-con e-parent\" data-id=\"5ef7dd5\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-d2e229d elementor-widget elementor-widget-spacer\" data-id=\"d2e229d\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-c412efc e-flex e-con-boxed e-con e-parent\" data-id=\"c412efc\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3740748 elementor-widget elementor-widget-spacer\" data-id=\"3740748\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-8479a52 e-flex e-con-boxed e-con e-parent\" data-id=\"8479a52\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3f93084 elementor-widget elementor-widget-heading\" data-id=\"3f93084\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Initial measurement of investment properties<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-82aa387 elementor-widget elementor-widget-text-editor\" data-id=\"82aa387\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">An investment property should be initially measured at cost. Costs associated with the transaction should be included in the initial measurement.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">\u00a0The cost of acquiring an investment property comprises its purchase price and any directly attributable expenditures. Directly attributable expenditures include, for example, professional fees for legal services, property transfer taxes and other costs associated with the transaction.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The cost of an investment property constructed by the enterprise itself is its cost at the date the construction or development is completed. Until that date, the enterprise shall apply IAS 16 Property, Plant and Equipment. From that date, the property becomes investment property and the provisions of this Standard apply to it (see paragraphs 51(e) and 59 below).<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The cost of an investment property is not increased by start-up costs (unless necessary to bring the property into a usable condition), initial operating losses incurred before the investment property reaches the expected level of occupancy, or abnormal amounts of waste, labor or other resources incurred in the construction or development of the property.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">If payment for an investment property is deferred, its cost is equivalent to the cash price. The difference between this amount and the total payments will be recognized as an interest expense over the credit period.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2ee47f5 elementor-widget elementor-widget-spacer\" data-id=\"2ee47f5\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-2a03c00 e-flex e-con-boxed e-con e-parent\" data-id=\"2a03c00\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-36ed66e elementor-widget elementor-widget-heading\" data-id=\"36ed66e\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Key Differences Between Investment Property and Property of Plant and Equipment<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-d8df239 e-flex e-con-boxed e-con e-parent\" data-id=\"d8df239\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-0b2cb1d elementor-widget elementor-widget-spacer\" data-id=\"0b2cb1d\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-eb87d7e elementor-widget elementor-widget-html\" data-id=\"eb87d7e\" data-element_type=\"widget\" data-widget_type=\"html.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<table border=\"1\" cellspacing=\"0\" cellpadding=\"10\" style=\"width: 80%; margin: 0 auto;\">\r\n  <thead>\r\n    <tr>\r\n      <th>Criterion<\/th>\r\n      <th>Investment Property<\/th>\r\n      <th>Property, Plant and Equipment<\/th>\r\n    <\/tr>\r\n  <\/thead>\r\n  <tbody>\r\n    <tr>\r\n      <td>Main purpose<\/td>\r\n      <td>Obtain income from rental or appreciation.<\/td>\r\n      <td>Use in the production of goods\/services or for administrative purposes.<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>Use in operational activity<\/td>\r\n      <td>It is not used directly in production or in the provision of services.<\/td>\r\n      <td>It is used directly in the company&#039;s daily operations.<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>Typical examples<\/td>\r\n      <td>Office building leased to third parties, land for appreciation.<\/td>\r\n      <td>Factory, machinery, office equipment used for commercial activities.<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>Accounting treatment<\/td>\r\n      <td>Fair value valuation (if that method is chosen).<\/td>\r\n      <td>Valuation at cost and depreciation over its useful life.<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>Sale<\/td>\r\n      <td>It is generally not intended for sale.<\/td>\r\n      <td>You can sell it, but that is not its primary purpose (it is an operating asset).<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>Valuation in financial statements<\/td>\r\n      <td>It can be recorded at its market value, reflecting the revaluation.<\/td>\r\n      <td>It is recorded at cost less accumulated depreciation.<\/td>\r\n    <\/tr>\r\n  <\/tbody>\r\n<\/table>\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c72c813 elementor-widget elementor-widget-spacer\" data-id=\"c72c813\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7a6c03a e-flex e-con-boxed e-con e-parent\" data-id=\"7a6c03a\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-65ee546 elementor-widget elementor-widget-heading\" data-id=\"65ee546\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Subsequent disbursements<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-032dd83 elementor-widget elementor-widget-text-editor\" data-id=\"032dd83\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">A subsequent expenditure relating to an investment property that has been recognised should be added to the carrying amount of the investment property when it is probable that some future economic benefit, in addition to the standard yield originally assessed for the existing property, will flow to the enterprise. All other subsequent expenditures should be recognised as an expense in the period in which they are incurred.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The appropriate accounting treatment for expenditure incurred subsequent to the acquisition of an investment property depends on the circumstances that were taken into account in the initial recognition and measurement of the investment in question. For example, where the carrying amount of an investment property already reflects a loss of future economic benefits, subsequent expenditure to restore the expected future economic benefits of the asset will be capitalised. This is also the case where the purchase price of an asset reflects the obligation of the enterprise to incur expenditure that is necessary, in the future, to bring the asset into working condition. An example of this might be the acquisition of a building that requires restoration. In such circumstances, the subsequent expenditure will be added to the carrying amount.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-ec06f36 e-flex e-con-boxed e-con e-parent\" data-id=\"ec06f36\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4cd0fd2 elementor-widget elementor-widget-spacer\" data-id=\"4cd0fd2\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-dcdb504 e-flex e-con-boxed e-con e-parent\" data-id=\"dcdb504\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-607b481 elementor-widget elementor-widget-heading\" data-id=\"607b481\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Measurement after initial recognition<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8d5b966 elementor-widget elementor-widget-text-editor\" data-id=\"8d5b966\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">This Standard requires all companies to determine the fair value of their investment property for measurement (fair value model) or disclosure (cost model) purposes. Companies are encouraged, but not required, to determine the fair value of their investment property based on a valuation performed by an independent expert who has recognized professional ability and recent experience in the locality and type of investment property being valued.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1000dba e-flex e-con-boxed e-con e-parent\" data-id=\"1000dba\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-ee4f720 elementor-widget elementor-widget-spacer\" data-id=\"ee4f720\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-e03e281 e-flex e-con-boxed e-con e-parent\" data-id=\"e03e281\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-dbbdd27 elementor-widget elementor-widget-heading\" data-id=\"dbbdd27\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Fair value model<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f28d9d9 elementor-widget elementor-widget-text-editor\" data-id=\"f28d9d9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">After initial recognition, a company that elects the fair value model must measure all of its investment properties at their fair value.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">Gains or losses arising from a change in the fair value of an investment property should be included in net profit or loss in the period in which they arise.<\/span><\/p><p>\u00a0<\/p><p><b><i>The fair value of an investment property is usually its market value.<\/i><\/b><span style=\"font-weight: 400;\">. <\/span><i><span style=\"font-weight: 400;\">Fair value is measured as the most probable price that can be obtained in the market at the balance sheet date.<\/span><\/i><span style=\"font-weight: 400;\">, according to the definition of fair value. It is the best price that can reasonably be obtained by the seller and the most advantageous price that is reasonably possible for the buyer. This form of estimate specifically excludes an over or underprice due to special arrangements or circumstances, such as atypical financing, sale and leaseback arrangements, special consideration or concessions earned by any situation associated with the sale.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The company must determine the fair value without any deduction for costs associated with the transaction that it may incur due to the sale or other form of dispossession.<\/span><\/p><p>\u00a0<\/p><p><b><i>The fair value of an investment property should reflect the actual state and conditions of the market at the balance sheet date, and not at any earlier or later date.<\/i><\/b><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The estimated fair value is specific to a given date.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The fair value of an investment property reflects, among other things, the rental income that could be earned from leases under current conditions, as well as reasonable and defensible assumptions that represent the market view that experienced and interested parties might make about the income that could be earned from future leases in light of current market conditions.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The definition of fair value refers to \u201cinterested and informed parties\u201d<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">The definition of fair value refers to an unrestricted transaction.<\/span><\/p><p><br \/><br \/><br \/><\/p><p><span style=\"font-weight: 400;\">The best evidence of fair value is normally given by current prices in an active market, for similar properties in the same location and condition, and subject to leases or other agreements, related to the property, that are similar.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">In rare cases, when an enterprise first acquires an investment property (or when an existing property is first converted to investment property, after construction or development is completed, or after a change in use) there is clear evidence that the variation in the range of fair value estimates will be so large and the probabilities of the different possible outcomes so difficult to assess that the usefulness of a single fair value estimate is invalidated. This may indicate that the fair value of the property cannot be determined reliably on a continuous basis.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">If an office is rented furnished, the fair value of the office generally includes the fair value of the furniture, because rental income is derived from the furnished office. When furniture is included in the fair value of investment property, the company should not recognize such furniture as a separate asset.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-47159bb e-flex e-con-boxed e-con e-parent\" data-id=\"47159bb\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-8881970 elementor-widget elementor-widget-spacer\" data-id=\"8881970\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7c01070 e-flex e-con-boxed e-con e-parent\" data-id=\"7c01070\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-9781cd3 elementor-widget elementor-widget-heading\" data-id=\"9781cd3\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Inability to determine fair value reliably<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9f1290e elementor-widget elementor-widget-text-editor\" data-id=\"9f1290e\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">There is a rebuttable presumption that companies will be able to determine, reliably and on an ongoing basis, the fair value of an investment property. However, in rare cases, when an company first acquires an investment property (or when an existing property first becomes an investment property after completion of construction or development, or after a change in use) there is clear evidence that the company will not be able to determine, reliably and on an ongoing basis, the fair value of the investment property.<\/span><\/p><p><span style=\"font-weight: 400;\">This arises when, and only when, similar transactions in the market are not frequent and other means of estimating fair value (for example, based on discounted cash flow projections) are not available. In such cases, an enterprise should measure the investment property using the benchmark treatment provided for in IAS 16 Property, Plant and Equipment. The residual value of the investment property should be assumed to be zero. The enterprise should continue to apply IAS 16 until the investment property is disposed of.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">If an enterprise has previously measured an investment property at fair value, it should continue to measure it at fair value until it is disposed of (or until the property is owner-occupied, or the enterprise begins converting the property to sale in the ordinary course of business) even if comparable market transactions become infrequent or market prices become unavailable.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-a6e24f1 e-flex e-con-boxed e-con e-parent\" data-id=\"a6e24f1\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-d2ad075 elementor-widget elementor-widget-spacer\" data-id=\"d2ad075\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-91fc4e1 e-flex e-con-boxed e-con e-parent\" data-id=\"91fc4e1\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3f2439c elementor-widget elementor-widget-heading\" data-id=\"3f2439c\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Cost model<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f5f2d6b elementor-widget elementor-widget-text-editor\" data-id=\"f5f2d6b\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">After initial recognition, a company that chooses the cost model must measure all its investment property using the benchmark treatment in IAS 16 Property, Plant and Equipment, that is, at cost less accumulated depreciation and any accumulated impairment losses. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-236713c e-flex e-con-boxed e-con e-parent\" data-id=\"236713c\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-96717cb elementor-widget elementor-widget-spacer\" data-id=\"96717cb\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-daff0e2 e-flex e-con-boxed e-con e-parent\" data-id=\"daff0e2\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3947732 elementor-widget elementor-widget-heading\" data-id=\"3947732\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Transfers<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-208d9f8 elementor-widget elementor-widget-text-editor\" data-id=\"208d9f8\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Transfers to or from investment property should be made when, and only when, there is a change in use, as evidenced by:<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(a) the commencement of owner-occupancy, in the case of a transfer of an investment property to an owner-occupied facility;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) the commencement of a development with the intention of selling, in the case of a transfer of an investment property to inventory;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(c) the end of owner-occupancy, in the case of a transfer from an owner-occupied facility to an investment property;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(d) the commencement of a leasing transaction to a third party, in the case of a transfer of inventories to investment properties; or<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(e) the completion of construction or development, in the case of a transfer from property under construction or development (covered by IAS 16 Property, Plant and Equipment) to investment property.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">For the transfer of investment property, carried at fair value, to owner-occupied property or to inventory, the cost of the property for subsequent accounting purposes, whether IAS 16 or IAS 2 is used, should be the fair value at the date of the change in use.<\/span><\/p><p><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">If an owner-occupied property becomes an investment property, which is recorded at fair value, the company must apply IAS 16 until the date of the change in use. The company must treat any difference at that date between the property&#039;s carrying amount under IAS 16 and its fair value in the same way as it would record a revaluation using IAS 16.<\/span><\/p><p><span style=\"font-weight: 400;\">When a company completes the construction or development of an investment property that is built by the company and will be recorded at fair value, any difference between the fair value of the property at that date and its previous carrying amount should be recognized as profit or loss for the period.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7b1596d e-flex e-con-boxed e-con e-parent\" data-id=\"7b1596d\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-eb6f811 elementor-widget elementor-widget-spacer\" data-id=\"eb6f811\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-507bd15 e-flex e-con-boxed e-con e-parent\" data-id=\"507bd15\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1ffa0a9 elementor-widget elementor-widget-heading\" data-id=\"1ffa0a9\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Disappropriations<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-02be1e9 elementor-widget elementor-widget-text-editor\" data-id=\"02be1e9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">An investment property should be derecognized (removed from the balance sheet) when the company disposes of it or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">Consideration receivable arising from the disposal of an investment property shall be initially recognised at fair value. In particular, if payment for an investment property is deferred, the consideration received shall be initially recognised at its cash price.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-9ade9d5 e-flex e-con-boxed e-con e-parent\" data-id=\"9ade9d5\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-fe2dbf4 elementor-widget elementor-widget-spacer\" data-id=\"fe2dbf4\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-f4bb7ef e-flex e-con-boxed e-con e-parent\" data-id=\"f4bb7ef\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-83a2062 elementor-widget elementor-widget-heading\" data-id=\"83a2062\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Information to be disclosed<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-299f068 elementor-widget elementor-widget-heading\" data-id=\"299f068\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Fair value model and cost model<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6e86143 elementor-widget elementor-widget-text-editor\" data-id=\"6e86143\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The disclosures presented below apply in addition to those mentioned in IAS 17, Leases. Under IAS 17, an owner of investment property shall include disclosures applicable to the lessor in respect of operating leases. Under IAS 17, an enterprise that has investment property subject to finance leases shall include disclosures applicable to the lessee and disclosures applicable to the lessor in respect of any operating leases granted by the enterprise.<\/span><\/p><p>\u00a0<\/p><p><b><i>A company must disclose:<\/i><\/b><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(a) The criteria developed by the enterprise to distinguish investment property from owner-occupied property and property held for sale in the ordinary course of business operations;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) The significant methods and assumptions applied in determining the fair value of investment properties, including a statement as to whether the fair value determination was made on the basis of market evidence or whether more account was taken of other factors (which should be disclosed by the company) in light of the nature of the properties and the lack of comparable market data;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(c) The extent to which the fair value of investment property (as measured or disclosed in the financial statements) is based on a valuation made by a qualified appraiser who has recognised professional ability and recent experience in the locality and category of the investment property being valued; alternatively, if there has been no such valuation, that fact shall also be disclosed;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(d) The figures included in the income statement for:<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(i) Income derived from rentals from investment properties;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(ii) Direct operating expenses (including repairs and maintenance) related to investment properties that generated rental income during the period; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(iii) Direct operating expenses (including repairs and maintenance) related to investment properties that did not generate rental income during the period;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(e) The existence and amount of restrictions on the sale of investment property or on the remittance of profits and proceeds from its dispossession; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(f) Significant contractual obligations for the acquisition, construction or development of investment properties, or for repairs, maintenance or improvements.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d523cd5 elementor-widget elementor-widget-heading\" data-id=\"d523cd5\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Fair value model<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cf29e77 elementor-widget elementor-widget-text-editor\" data-id=\"cf29e77\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">A company applying the fair value model must also present a reconciliation of the carrying amounts of investment properties at the beginning and end of the period, including the following (comparative information is not required):<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(a) Additions, disclosing separately those arising from acquisitions and those relating to subsequent capitalized expenditures;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) Additions resulting from acquisitions through business combinations;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(c) Disappropriations;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(d) Net gains or losses from fair value adjustments;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(e) Net exchange differences arising from the translation of the financial statements of a foreign entity;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(f) Transfers of investment property to and from inventory or owner-occupied property; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(g) Other movements.<\/span><\/p><p>\u00a0<\/p><ol start=\"68\"><li><span style=\"font-weight: 400;\"> \u00a0 In the exceptional case where an enterprise measures its investment property using the benchmark treatment in IAS 16 Property, Plant and Equipment (because of the lack of a reliable fair value, see paragraph 47), the reconciliation required under the preceding paragraph must disclose the amounts relating to that investment property separately from the amounts relating to other investment property. In addition, the enterprise must disclose:<\/span><\/li><\/ol><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(a) A description of the investment properties;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) An explanation of why the fair value cannot be measured reliably;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(c) If possible, the range of estimates within which the fair value is likely to lie; and<\/span><\/p><p><br \/><br \/><\/p><p><span style=\"font-weight: 400;\">(d) When it has investment properties not recorded in books at fair value:<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(i) The fact that the company has disposed of investment properties not recorded in books at their fair value;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(ii) The carrying amount of such investment properties at the time of their sale; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(iii) The amount of the gain or loss recognized.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8f18036 elementor-widget elementor-widget-heading\" data-id=\"8f18036\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Cost model<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8255344 elementor-widget elementor-widget-text-editor\" data-id=\"8255344\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The company that applies the cost model must also disclose:<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(a) the depreciation methods used;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(b) the useful lives or depreciation rates used;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(c) the gross carrying amount and accumulated depreciation (increased by accumulated impairment losses) at the beginning and end of the period;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(d) a reconciliation of the carrying amounts of investment property at the beginning and end of the period, including the following (comparative information is not required):<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(i) additions, presenting separately those arising from acquisitions and those referring to subsequent capitalized disbursements;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(ii) additions resulting from acquisitions through business combinations;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(iii) disappropriations;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(iv) depreciation;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(v) the amount of the loss recognised on impairment of assets, and the amount of impairment losses on assets that have reversed during the period in accordance with IAS 36 Impairment of Assets;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(vi) net exchange differences arising from the translation of the financial statements of a foreign entity;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(vii) transfers of investment properties to and from inventories or owner-occupied properties; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(viii) other movements; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(e) the fair value of investment property, when a business cannot determine the fair value of investment property reliably, the company should provide the following information;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(i) a description of the investment properties;<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(ii) an explanation of why the fair value could not be determined reliably; and<\/span><\/p><p>\u00a0<\/p><p><span style=\"font-weight: 400;\">(iii) if possible, the range of estimates within which the fair value is likely to lie.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-670d482 e-flex e-con-boxed e-con e-parent\" data-id=\"670d482\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4f98874 elementor-widget elementor-widget-spacer\" data-id=\"4f98874\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1beb22a e-flex e-con-boxed e-con e-parent\" data-id=\"1beb22a\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-59f7bc4 elementor-widget elementor-widget-heading\" data-id=\"59f7bc4\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">How long is NIC-40 valid?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0ea56c1 elementor-widget elementor-widget-text-editor\" data-id=\"0ea56c1\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">This International Accounting Standard (IAS 40) is effective for annual financial statements covering periods beginning on or after 1 January 2001. Earlier application is encouraged. If an enterprise applies this Standard for periods beginning before 1 January 2001, it must disclose that fact.<\/span><\/p><p><span style=\"font-weight: 400;\">This Standard supersedes IAS 25 Accounting for Financial Investments, in relation to investment property.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-57b5662 elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"57b5662\" data-element_type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-6e226c7 e-flex e-con-boxed e-con e-parent\" data-id=\"6e226c7\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-e2cfd41 elementor-widget elementor-widget-heading\" data-id=\"e2cfd41\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">How is IAS 40 applied in Mexico?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e6bef0d elementor-widget elementor-widget-text-editor\" data-id=\"e6bef0d\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">According to IAS 40, investment properties are those that:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They are held for rental income or for appreciation in value or a combination of both.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They are not used in the production or supply of goods or services or in the administrative activities of the company.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">In Mexico, NIF C-18 also establishes that an investment property is one that is acquired for the purpose of generating income through its rental or for its revaluation.<\/span><\/p><p><span style=\"font-weight: 400;\">Under IFRS C-18, the option of using either the cost method or the fair value method for measuring investment property is permitted, as is IAS 40. However, IFRS C-18 makes an important distinction:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fair value method: If this method is chosen, changes in fair value must be recognized in the income statement (not in equity).<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cost method: If this method is chosen, investment properties are recorded at historical cost less accumulated depreciation.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">This treatment is similar to that of IAS 40, but with greater flexibility in the use of each method.<\/span><\/p><h3>\u00a0<\/h3><h3><b>Transition from Investment Property to Property of Plant and Equipment and Vice Versa<\/b><\/h3><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">IAS 40 states that if an investment property is no longer used for the purpose of generating rental income and is instead used for the operations of the company (for example, the company starts using the property for its own activity), it must be reclassified from investment property to property of plant and equipment.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Similarly, if a property of plant and equipment begins to be rented or is held for the purpose of appreciation, it is reclassified as investment property.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">In Mexico, this practice is also applied under NIF C-18, with the same reclassification treatment.<\/span><\/p><h3>\u00a0<\/h3><h3><b>Depreciation and Useful Life<\/b><\/h3><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Investment properties measured by the cost method must be depreciated over their useful life, as is done with fixed assets under NIF C-6.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the fair value method is used, depreciation is not applied, since the value is adjusted to market value and not to historical cost.<\/span><\/li><\/ul><h3>\u00a0<\/h3><h3><b>Impact on Financial Statements<\/b><\/h3><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fair value method<\/b><span style=\"font-weight: 400;\">: Changes in the fair value of investment properties are <\/span><b>recognized directly in the income statement<\/b><span style=\"font-weight: 400;\">. This reflects increases or decreases in the value of the asset as operating income or losses.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>cost method<\/b><span style=\"font-weight: 400;\">: Property is stated on the balance sheet at cost less accumulated depreciation, and income is generated by leasing.<\/span><\/li><\/ul><p><b>Tax Considerations in Mexico<\/b><\/p><p><span style=\"font-weight: 400;\">It is important to note that although investment properties are handled differently in accounting terms, tax authorities in Mexico, such as the <\/span><b>Tax Administration Service (SAT)<\/b><span style=\"font-weight: 400;\">, may have their own rules for the tax treatment of income from investment properties, which could include considerations regarding the deduction of expenses, amortization, and the treatment of capital gains from the sale of property.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d229fba elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"d229fba\" data-element_type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-73a762aa e-flex e-con-boxed e-con e-parent\" data-id=\"73a762aa\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7fd91ac3 elementor-widget elementor-widget-global elementor-global-1446 elementor-widget-heading\" data-id=\"7fd91ac3\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h5 class=\"elementor-heading-title elementor-size-default\">Links that may interest you<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-3bc4a849 e-grid e-con-boxed e-con e-parent\" data-id=\"3bc4a849\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4e645e0f elementor-position-top elementor-widget elementor-widget-image-box\" data-id=\"4e645e0f\" data-element_type=\"widget\" data-widget_type=\"image-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-image-box-wrapper\"><figure class=\"elementor-image-box-img\"><a href=\"https:\/\/anepsaglobal.com\/en\/avaluo-de-negocio-en-marcha\/\" tabindex=\"-1\"><img decoding=\"async\" src=\"https:\/\/anepsaglobal.com\/wp-content\/uploads\/2024\/09\/Negocio-en-marcha.png\" title=\"\" alt=\"\" loading=\"lazy\" \/><\/a><\/figure><div class=\"elementor-image-box-content\"><h4 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href=\"https:\/\/anepsaglobal.com\/en\/normas-internacionales-de-informacion-financiera\/\">International Financial Reporting Standards<\/a><\/h4><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2ecb7bf3 elementor-position-top elementor-widget elementor-widget-image-box\" data-id=\"2ecb7bf3\" data-element_type=\"widget\" data-widget_type=\"image-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-image-box-wrapper\"><figure class=\"elementor-image-box-img\"><a href=\"https:\/\/anepsaglobal.com\/en\/normas-de-informacion-financiera\/\" tabindex=\"-1\"><img decoding=\"async\" src=\"https:\/\/anepsaglobal.com\/wp-content\/uploads\/2024\/02\/Normas-de-Informacion-Financiera.png\" title=\"\" alt=\"\" loading=\"lazy\" \/><\/a><\/figure><div class=\"elementor-image-box-content\"><h4 class=\"elementor-image-box-title\"><a href=\"https:\/\/anepsaglobal.com\/en\/normas-de-informacion-financiera\/\">Financial Reporting Standards<\/a><\/h4><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>International Accounting Standard 40 \u2013 Investment Property \u2013 INVESTMENT PROPERTY index What is the objective of IAS 40? The objective of IAS 40 is to prescribe the accounting treatment for investment property and its related disclosure requirements. What is the scope of IAS 40? IAS 40 must be applied in the recognition, measurement and [\u2026]<\/p>","protected":false},"author":3,"featured_media":3769,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","link_1_titulo":"","link_relacionado_1":"","link_2_titulo":"","link_relacionado_2":"","link_imagen_1":"","link_imagen_2":"","footnotes":""},"categories":[10],"tags":[],"class_list":["post-2377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/posts\/2377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/comments?post=2377"}],"version-history":[{"count":94,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/posts\/2377\/revisions"}],"predecessor-version":[{"id":3772,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/posts\/2377\/revisions\/3772"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/media\/3769"}],"wp:attachment":[{"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/media?parent=2377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/categories?post=2377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/anepsaglobal.com\/en\/wp-json\/wp\/v2\/tags?post=2377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}