Question Chapter 06

Which of the following is not e transfer from or to investment property under fA5 40?

• Commencement of owner occupation

• Transfer from undetermined use to an operating lease

• Commencement of development with a view to sale

• End at construction at development

Which of the following is not an example of investment property?

• Land held for undetermined future use

• Property teamed to another entity under a finance lease

• Property leased to another entity under an operating lease

• Property being constructed for future use as an Investment property

If an entity uses part of a building for their own use, and rents the remainder. How should this be treated?

• All as investment property under IAS 40 — Investment Property

• Account for separately under ‘IAS - 16 Property, Plant and Equipment’ and ‘IAS - 40 Investment Property’

• All under IAS 16 - Property, Plant and Equipment

• None of these

If an entity uses the cost model for investment property, it must also disclose the fair value of the investment property

• True

• False

In case of a property held under an operating lease and classified as investment property:

• The entity has to account for the investment property under the cost model only

• The entity has to use the fair value method only

• The entity has the choice between fair value model and cost model

• The entity needs only to disclose the fair value and can use the cost model under IAS 38

Investment property can be held by:

• A lessor, under a finance lease

• A lessee, under a finance lease

• Both

• None of the above

The cost of a property interest held under a lease should be valued at:

• Fair value

• The present value of the minimum lease payments

• The higher of a and b

• The lower of a and b

Transfer of investment property to PP&E are appropriate:

• Based on the discretion of management

• When there is a change in the use of the property permitting the same

• Only if the entity adopts the fair value model under IAS 38

• Never as such reclassification is not permitted