IAS 40

The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements

• True
• False

This standard applies to the measurement in a lessee's financial statements of investment property interests held under a lease accounted for as a finance lease

• True
• False

This standard applies to the measurement in a lessee's financial statements of investment property interests held under a lease accounted for as a finance leaseand to the measurement in a lessor's (providing lease) financial statements of investment property provided to a lessee (receiving lease) under an operating lease

• True
• False

IAS 40 deals with recognition of lease income from investment property

• True
• False

Carrying amount is the amount at which an asset is recognised in the statement of financial position at the date the entity took ownership of the asset

• True
• False

Investment property is property (land or a building — or part of a building — or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for:
(a)  use in the production or supply of goods or services or for administrative purposes; or
(b)  sale in the ordinary course of business

If a property management company receives rentals from its owned property, the building and land is considered investment property

• True
• False

Under what circumstance can a lessee classify a leased property interest as investment property if it is an operating lease?

• Management believes it is more appropriate for the financial statements.
• The lessee uses a fair value model and the property would otherwise meet the definition of an investment property.
• The rents and capital appreciation created from the property are a substantial source of the firm's revenues.
• All of the above

Why is the building where a manufacturing company's factory is located not considered investment property?

• The cash flows generated from the factory production as a result of the building is independant from the cash flows generated as a result of other assets.
• The cash flows generated from the factory production as a result of the building is not independent from the cash flows generated as a result of other assets.
• Historically the company has not seen the value of the building appreciate and does not expect it to in the future.
• The company is planning on moving locations in the next 3 years.

Which of the following illustrates an investment property?

• A Vancouver condo that is rented by a grocery store for capital appreciation and rental
• A building that operates and derives its cash flow from running as a hotel
• A building that operates and derives its cash flow from running as a restaurant
• A piece of land that is used as a farm

When it is probable that the future economic benefits that are associated with the investment property will flow to the entity and the cost of the investment property can be measured reliably, the property can be:

• Measured as an asset
• Measured as a liability
• Expensed in the income statement in the period of payment
• None of the above