Investment Property Quiz

ABC Ltd. owns a property which has two parts: part A and part B. Part A is used to earn rental income; Part B is used for administrative purpose. Each part can be sold separately. How should ABC classify this property?

• Part A should be classified as Investment property; part B should be classified as Owner-occupied property

• Part A should be classified as Investment property; part B should be classified as Inventories

• Entire property should be classified as Investment property if the portion of B is insignificant

• Entire property should be classified as Owner-occupied property if the portion of B is significant

ABC Ltd. owns a property which has two parts, part A and part B. Part A is used to earn rental income; Part B is used for administrative purposes. These two parts cannot be sold separately. How should ABC classify this property?

• Part A should be classified as Investment property; part B should be classified as Owner-occupied property

• Entire property should be classified as Owner-occupied property if the portion of B is significant

• Part A should be classified as Investment property; part B should be classified as Inventories

• Entire property should be classified as Investment property if the portion of B is insignificant

Which of the following should be classified as Investment property?

• Land and building held for sale in the ordinary course of business

• Land and building held to earn rental income

• Property being constructed on behalf of third parties.

• An equipment held to earn rental income

Entity measures its investment property under:

• Cost model, fair value model or revaluation model

• Cost model or Fair value model

• Cost model only

• Cost model or Revaluation model

ABC Ltd. chooses a cost model for its investment property. It sold an investment property that originally cost $20 million. The selling price was $6 million. Depreciation of $12 million had been recorded up to the date of sale. There was no accumulated impairment loss. What does this disposal result in?

• $2 million gain

• $14 million loss

• $14 million gain

• $2 million loss

ABC Ltd. chooses a cost model for its investment property. On 1 Jan 20X8, ABC Ltd. transferred an investment property to an owner-occupied property. Investment property originally cost $20 million; accumulated depreciation up to the date of transfer was $12 million, there was no impairment loss; property's fair value at 1 Jan 20X8 was $14 million. What was the carrying value of the Owner-occupied property recorded at 1 Jan 20X8?

• $14 million

• $8 million

• $12 million

• $2 million

ABC Ltd. chooses a fair value model for its investment property. On 1 Jan 20X8, ABC Ltd. transferred an investment property to an owner-occupied property. Investment property originally cost $20 million; accumulated depreciation up to the date of transfer was $12 million, there was no impairment loss; property's fair value at 1 Jan 20X8 was $14 million. What was the carrying value of the Owner-occupied property recorded at 1 Jan 20X8?

• $14 million

• $12 million

• $2 million

• $8 million

Choose the correct statement:

• Fair value of investment property carried under cost model should be disclosed in the Statement of Other Comprehensive Income.

• Fair value of investment property carried under cost model should be disclosed in the Disclosure note.

• Fair value of investment property carried under cost model should not be disclosed in any financial statement.

• Fair value of investment property carried under cost model should be disclosed in the Statement of financial position.

An entity purchased land and building for leasing out under operating lease. Following expenditures related to the acquisition: purchase price: 100; broker's commission: 10; property transfer tax: 20. What is the cost of the property?

• 120

• 130

• 100

• 110

Which of the following should be classified as Investment property?

• Land and building held for administrative purposes.

• Land and building held for long-term capital appreciation

• Land and building held for short-term sale in the ordinary course of business

• Land and building held for used in the production of goods