Investment Property

Code: 1260
👁 Views: 37

Account Information

Account Type Statement of Financial Position
Normal Balance Debit

Definition

Properties held to earn rental income or for capital appreciation, rather than for use in the company’s operations.

Sub-accounts

1261

Investment Property - Building

1262

Investment Property - Land

Common Journal Entries

Purchased investment property

Dr. Investment Property
Cr. Bank Account

Received rental income from investment property

Dr. Cash in Hand
Cr. Rental Income

Revaluation of investment property

Dr. Investment Property
Cr. Revaluation Gain

Sold investment property

Dr. Bank Account
Cr. Investment Property
Cr. Gain on Sale

Purchased investment property

Dr. Investment Property
Cr. Bank Account

Received rental income

Dr. Bank Account
Cr. Rental Income

Increase in fair value

Dr. Investment Property
Cr. Fair Value Gain

Related Accounts

Affects Cash and Cash Equivalents

International Accounting Standards

IFRS IAS 40 Investment Property

Choice between cost model and fair value model. Fair value changes in profit or loss.

IFRS IAS 40 Investment Property

Investment property is measured either at fair value or cost model. Fair value changes are recognized in profit or loss.

US GAAP ASC 360 Property, Plant and Equipment

No separate investment property standard. Carried at cost less depreciation.

⚠ Key Difference: IFRS vs GAAP

IFRS has dedicated IAS 40 with fair value option; GAAP uses cost model only