Measurement Subsequent to Initial Recognition

Measurement Subsequent to Initial Recognition

Set-up-company-in-vietnam-Vinasc122. After initial recognition, investment property should be measured at cost, less accumulated depreciation to arrive at net book value in the holding period.

Transfers

23. Transfers to, or from, investment property should be made when, and only when, there is a change in use, evidenced by:

(a) commencement of owner-occupation, for a transfer from investment property to owner-occupied property;

(b) commencement of development with a view to sale, for a transfer from investment property to inventories;

(c) end of owner-occupation, for a transfer from owner-occupied property to investment property;

(d) commencement of an operating lease to another party, for a transfer from inventories to investment property; or

(e) end of construction or development, for a transfer from property in the course of construction or development (covered by VAS 03, Tangible Fixed Assets) to investment property.

24. Paragraph 23(b) above requires an enterprise to transfer a property from investment property to inventories when, and only when, there is a change in use, evidenced by commencement of development with a view to sale.

When an enterprise decides to dispose of an investment property without development, the enterprise continues to treat the property as an investment property until it is derecognised (eliminated from the balance sheet) and does not treat it as inventory.

Similarly, if an enterprise begins to redevelop an existing investment property for continued future use as investment property, it remains an investment property and is not reclassified as owner-occupied property during the redevelopment.

25. Transfers between investment property, owner-occupied property and inventories do not change the net-book value of the property transferred and they do not change the cost of that property for measurement or disclosure purposes.

Disposals

Set-up-company-in-vietnam-Vinasc226. An investment property should be de-recognized (eliminated from the balance sheet) on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.

27. The disposal of an investment property may occur by sale or by entering into a finance lease. In determining the date of disposal for investment property and for recognising revenue from the sale of goods, an enterprise applies the criteria in VAS 14, Revenue and Other Income, VAS 06, Leases, applies on a disposal by entering into a finance lease or by a sale and leaseback.

28. Gains or losses arising from the retirement or disposal of investment property should be determined as the difference between the net disposal proceeds and the net-book value of the asset and should be recognised as income or expense in the income statement (unless VAS 06, Leases, requires otherwise on a sale and leaseback).

29. The consideration receivable on disposal of an investment property is recognised initially at fair value. In particular, if payment for an investment property is deferred, the consideration received is recognised initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognised as interest revenue under VAS 14, Revenue and Other Income.