Accounting · IAS 40 Investment Property
An entity transfers a building measured under the fair value model from investment property to owner-occupied property due to a change in use. Under IAS 40, how is the building treated at the date of reclassification?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The property must continue to be measured under the fair value model with gains recognized in profit or loss
- 2Any difference between its previous carrying amount and fair value must be recognized as a revaluation surplus in OCI
- 3Its fair value at the date of change in use becomes its deemed cost for subsequent accounting under IAS 16✓
- 4It must be remeasured to historical cost retrospectively and depreciated under IAS 16
Correct answer
Its fair value at the date of change in use becomes its deemed cost for subsequent accounting under IAS 16
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