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A property is classified as investment property if
Question options:
| a |
it is leased out under a finance lease |
| b |
the owner-occupied portion of the property is significant. |
| c |
the entity provides relatively insignificant ancillary services (e.g., security, janitorial services, and the like) to the occupants of the property. |
| d |
it is rented between a parent entity and a subsidiary and consolidated financial statements are prepared for the group |
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- If an entity as lessee presents as investment property a property interest held under an operating lease then the entity 1has the option of measuring some items of investment property using the cost model. 2shall measure in the financial statement all of its investment property using the fair value models 3shall measure that leased property interest under the fair value model and the remaining investment property using the cost model. 4shall measure that leased property interest under the cost model and the remaining investment property either using the cost model or the fair value model.1. Which of the following would not be reported as investment property? a. Property owned by the entity and leased out under one or more operating leases. b. Property held by the entity to be leased out under one or more operating leases c. Real estate held for an undetermined future use. d. Property owned by the entity and leased out to another entity under a finance lease. 2. All of the following do not qualify as investment property, except a. Machineries that are held for lease b. Hotels or motels c. Agricultural land purchased for appreciation purposes d. Equipment purchased for an indeterminate purpose 3. A property is classified as investment property if a. it is leased out under a finance lease. b. the owner-occupied portion of the property is significant. c. the entity provides relatively insignificant ancillary services (e.g., security, janitorial services, and the like) to the occupants of the property. d. it is rented between a parent entity and a subsidiary and…which of the following are fixed assets? Financial assets at fair value through profit or loss Interests in and advances to joint ventures, co-venturers and associates Property, plant and equipment Right-of-use assets Investment properties Trademarks, goodwill and other intangible assets Operating lease receivables Finance lease receivables
- No.1: answer the following Which of the following would not be reported as investment property? a. Property owned by the entity and leased out under one or more operating leases. b. Property held by the entity to be leased out under one or more operating leases c. Real estate held for an undetermined future use. d. Property owned by the entity and leased out to another entity under a finance lease. All of the following do not qualify as investment property, except a. Machineries that are held for lease b. Hotels or motels c. Agricultural land purchased for appreciation purposes d. Equipment purchased for an indeterminate purpose A property is classified as investment property if a. it is leased out under a finance lease. b. the owner-occupied portion of the property is significant. c. the entity provides relatively insignificant ancillary services (e.g., security, janitorial services, and the like) to the occupants of the property. d. it is rented between a parent entity and a…Howell Corporation, a publicly traded corporation, is the lessee in a leasing agreement with Brandon Inc. to lease land and a building. If the lease contains a bargain purchase option, Howell should record the land and the building as a(n) a. Operating lease and capital lease, respectively. b. Capital lease and operating lease, respectively. c. Capital lease but recorded as a single unit. d. Capital lease but separately classified.Which of the following is an investment property? Property that is currently being redeveloped to be sold in the ordinary course of business operations. Property that is currently being developed for future use as owner-occupied. Property that is leased out to another entity under a finance lease Building rented out in an operating lease whereby the owner provides minimal services. Which of the following assets may be classified as investment property? Land Building Equipment Land and Building only Intangible asset If ancillary services provided to occupants of a property held are <List A>, the property is classified as <List B> A B a. significant investment property b. insignificant property, plant and equipment (PPE) c. significant allocated to investment property and PPE d. insignificant…
- A subsidiary leases its office unit from its parent company. The parent company appropriately classifies this office unit as investment property in its statement of financial position. In the consolidated financial statements, how should this office unit be classified?a. Inventoriesb. Investment Propertyc. Property, Plant and Equipment d. Not presentedWingtip, a building company, owns a property which is currently occupied by its subsidiary. How should this property be accounted for in the CONSOLIDATED financial statements? Select one: a. As Investment Property under IAS 40 - Investment Property b. As Inventory under IAS 2 -Inventories c. As a lease under IFRS 16 Leases d. As Property under IAS 16, Property, Plant and Equipment An investment property under IAS 40 can be held for which of the following purposes? Select one: a. For use in the supply of services b. For use as retail premises c. For capital appreciation d. For use as an office If the fair value of an investment property cannot be reliably measured, how should it be recognised? Select one: a. At an estimated amount under IAS 40 b. At value in use c. At cost less depreciation under IAS 16 d. At estimated replacement cost Which of the following could require a property to be accounted for under IAS 40 Investment Property? Select one: a. The commencement of…Entity A obtained control of Entity B in a business combination. When computing for goodwill, Entity A would least likely account for which of the following? A. Entity B’s research and development projects that were already charged as expenses, but have a fair value as at the acquisition date. B. Entity B’s unrecorded identifiable intangible assets C. Operating lease between Entity A and Entity B, wherein Entity B is the lessee. D. Entity A’s expected costs of exiting or terminating some or all of Entity B’s activities after the combination.
- Transfers from investment property to property, plant and equipment are appropriate a. The entity can never transfer property into another classification on the balance sheet Once it is classified as investment property. b. When there is change of use. c. Only when the entity adopts the fair value model under IAS 38. d. Based on the entity’s discretion.An enterprise that holds a variable interest in a variable interest entity (VIE) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if:a. The VIE has issued no voting stock.b. The variable interest held by the enterprise involves a lease.c. The enterprise has a controlling financial interest in the VIE.d. Other equity interests in the VIE have the obligation to absorb the expected losses of the VIE.Explain how an entity would initially and subsequently measure its right-of-use asset and lease liability if the leased asset is classified as investment property under the fair value model? Assuming the fair value of the asset is not given at the end of the period, how will it be best computed? Compare and contrast the lease-related expenses if the entity uses the cost model and fair value model for its right-of-use asset.
