Investment Property - Proposed Accounting Policies for the Philippines
Chapter IX - INVESTMENT PROPERTY
1. Introduction. Investment property is property (land or a building – or part of a building – or both) held to earn rentals or for capital appreciation or both, rather than for:
1. use in the production or supply of goods or services or for administrative purposes; or 2. sale in the ordinary course of business.
These properties are distinguished from owner-occupied properties which generate cash flows that are directly attributable to the regular operation of the agency. Investment property generates cash flows that are largely independent of the other assets of the agency because they are merely held to earn rentals or for capital appreciation or both.
2. Scope. This Chapter shall apply to accounting for investment property including the measurement in a lessee’s financial statements of investment property interests held under a lease accounted for as a finance lease and to the measurement in an owner’s financial statements of investment property provided to a lessee under an operating lease. The following topics are not included because these will be covered under the Chapter on Leases:
a. Classification of leases as finance or operating leases; b. Recognition of lease revenue from investment property; c. Measurement in a lessee’s financial statements of property interests held under a lease accounted for as an operating lease; d. Measurement in a lessor’s financial statements of its net investments in a finance lease; e. Accounting for sale and leaseback transactions; and f. Disclosure about finance and operating leases.
However, this Chapter shall not apply to the following:
a. Biological assets related to agricultural activity; and b. Mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.
The following are examples of investment property and are
1. Introduction. Investment property is property (land or a building – or part of a building – or both) held to earn rentals or for capital appreciation or both, rather than for:
1. use in the production or supply of goods or services or for administrative purposes; or 2. sale in the ordinary course of business.
These properties are distinguished from owner-occupied properties which generate cash flows that are directly attributable to the regular operation of the agency. Investment property generates cash flows that are largely independent of the other assets of the agency because they are merely held to earn rentals or for capital appreciation or both.
2. Scope. This Chapter shall apply to accounting for investment property including the measurement in a lessee’s financial statements of investment property interests held under a lease accounted for as a finance lease and to the measurement in an owner’s financial statements of investment property provided to a lessee under an operating lease. The following topics are not included because these will be covered under the Chapter on Leases:
a. Classification of leases as finance or operating leases; b. Recognition of lease revenue from investment property; c. Measurement in a lessee’s financial statements of property interests held under a lease accounted for as an operating lease; d. Measurement in a lessor’s financial statements of its net investments in a finance lease; e. Accounting for sale and leaseback transactions; and f. Disclosure about finance and operating leases.
However, this Chapter shall not apply to the following:
a. Biological assets related to agricultural activity; and b. Mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.
The following are examples of investment property and are