Quiz on MFRS 140 Investment Property

Michael is studying accounting standards and comes across MFRS 140. What does MFRS 140 primarily deal with?

• Inventory management

• Investment properties accounting treatment

• Financial statement audits

• Employee benefits

Which of the following is NOT classified as investment property under MFRS 140?

• A building that is vacant but held for lease

• Owner-occupied property

• Land held for long-term capital appreciation

What is the definition of investment property according to MFRS 140?

• Owner-occupied buildings

• Property held for sale in the ordinary course of business

• Land or buildings held to earn rentals or for capital appreciation, or both

• Property used for administrative purposes

What must be included in the initial measurement of an investment property?

• Operating losses

• Day-to-day maintenance costs

• Only the purchase price

• Transaction costs

What model can an entity choose for subsequent measurement of investment property?

• Cost model or revaluation model

• Cost model or fair value model

• Historical cost model only

• Revaluation model only

Under the fair value model, how is a gain or loss from a change in fair value recognized?

• As a liability

• As a revaluation surplus

• In the statement of profiot or loss

• As an other comprehensive income

What happens to an investment property when it is derecognized?

• It is depreciated

• It is transferred to inventory

• It is permanently withdrawn from use

• It is revalued

Which of the following is true regarding the cost model for investment properties?

• It is only applicable to owner-occupied properties

• It requires annual revaluation

• It allows for depreciation and impairment testing

• It does not allow for any costs to be included