Economics · Financial Accounting
According to relevant IFRS Accounting Standards, what are the sequential accounting steps required to recognize the reclassification of an investment property into an owner-occupied sales office when its fair value is $337,000?
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- 1Step 1: Transfer the property between asset classifications at fair value; Step 2: Measure the property at its fair value of $337,000 as deemed cost; Step 3: Depreciate the property under IAS 16.✓
- 2Step 1: Transfer the property between asset classifications; Step 2: Depreciate the property; Step 3: Measure the property at its fair value of $337,000.
- 3Step 1: Measure the property at its fair value of $337,000; Step 2: Depreciate the property; Step 3: Transfer the property between non-current asset classifications.
- 4None of the above sequences are correct.
Correct answer
Step 1: Transfer the property between asset classifications at fair value; Step 2: Measure the property at its fair value of $337,000 as deemed cost; Step 3: Depreciate the property under IAS 16.
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