Which of the following statements best describes owner occupied property? (2024)

Which of the following statements best describes owner occupied property?

Which TWO of the following statements best describe 'owner-occupied property', according to IAS40 Investment property ? The correct answers are "Property held for use in the production and supply of goods or services" and "Property held for administrative purposes". IAS40 para 5 defines owner-occupied property.

Investment property is property that consists of land, a building or part of a building, or both land and building, held by an owner, or lessee under a finance (capital) lease, for the purpose of earning rent, for capital appreciation, or for both rental income and capital appreciation.

When an entity uses the cost model, transfers between investment property, owner-occupied property and inventories do not change the carrying amount of the property transferred and they do not change the cost of that property for measurement or disclosure purposes. 60.

When a property is partially owner occupied and partially held for rental/capital gain, the property is not an investment property unless the non-investment part is insignificant (IAS 40.10).

Examples of investment property are land held for appreciation and a building held for current or future leases to third parties.

Which TWO of the following statements best describe 'owner-occupied property', according to IAS40 Investment property ? The correct answers are "Property held for use in the production and supply of goods or services" and "Property held for administrative purposes".

Investment properties are initially measured at cost and, with some exceptions. may be subsequently measured using a cost model or fair value model, with changes in the fair value under the fair value model being recognised in profit or loss.

The standard IAS 40 Investment Property says that when you transfer an asset from owner-occupied property to the investment property, you need to apply IAS 16 until the date of transfer.

Owner-occupied property is property held (by the owner or by the lessee under a finance lease) for use in the production or supply of goods or services, or for administrative purposes.

Investment property is held to earn rentals or for capital appreciation or both. Therefore, an investment property generates cash flows largely independently of the other assets held by an entity. This distinguishes investment property from owner-occupied property.

What is the best evidence of fair value of an investment property?

The best evidence of fair value for an investment property is price in a binding sale agreement fair value determined on the basis of observable data current price in an active market. management's estimate of future cash flows multiplied by a discount rate. current price in an active market.

IAS 40 Investment Property applies to the accounting for property (land and/or buildings) held to earn rentals or for capital appreciation (or both).

14. The carrying amount for current investments is the lower of cost and fair value. In respect of investments for which an active market exists, market value generally provides the best evidence of fair value.

1. Land a company owns but is holding to sell to customers should be classified on the balance sheet as "Inventory" rather than in the property, plant, & equipment section. 1. On 1/1/17, Nelson Corp.

The major characteristics of property, plant, and equipment are: (1) They are acquired for use in operations and not for resale. (2) They are long-term in nature and usually subject to depreciation. and (3) They possess physical substance.

All of the following properties fall under the definition of investment property, except. Land held for long-term capital appreciation. Property occupied by an employee paying the market rent. Land held for a currently undetermined use. A building owned by an entity and leased out under an operating leased.

An investment property is real estate property purchased with the intention of earning a return on the investment either through rental income, the future resale of the property, or both. The property may be held by an individual investor, a group of investors, or a corporation.

IAS 40, paragraph 11

For example, if an entity owns and manages a hotel, services provided to guests are significant to the arrangement as a whole. Therefore, an owner-managed hotel is owner-occupied property, rather than investment property.

All of the following properties fall under the definition of investment property, except. Land held for long-term capital appreciation. Property occupied by an employee paying the market rent. Land held for a currently undetermined use. A building owned by an entity and leased out under an operating leased.

What is investment property according to IAS 40?

Investment property is land or a building (including part of a building) or both that is: held to earn rentals or for capital appreciation or both; not owner-occupied; not used in production or supply of goods and services, or for administration; and.

IAS 40, paragraph 11

For example, if an entity owns and manages a hotel, services provided to guests are significant to the arrangement as a whole. Therefore, an owner-managed hotel is owner-occupied property, rather than investment property.

14. The carrying amount for current investments is the lower of cost and fair value. In respect of investments for which an active market exists, market value generally provides the best evidence of fair value.

1. Land a company owns but is holding to sell to customers should be classified on the balance sheet as "Inventory" rather than in the property, plant, & equipment section. 1. On 1/1/17, Nelson Corp.

Capital gain (or loss) is the difference between the adjusted basis of property and its net selling price. A capital gain or capital loss has tax consequences to the owner of investment property.