Accounting · Investment Property (IAS 40)
Edge Co measures its investment properties using the fair value model. On 1 July 20X5, it transferred an investment property to owner-occupied property. The property had cost $500,000, a carrying amount of $750,000, and a fair value of $800,000 on the date of transfer. Which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1This is a change in accounting policy and should be applied retrospectively at its original cost of $500,000 less accumulated depreciation.
- 2On 1 July 20X5, the property is remeasured to $800,000, and a $50,000 gain is recognised in profit or loss. The deemed cost of the owner-occupied property is $800,000.✓
- 3The investment property is transferred to owner-occupied property at its carrying amount of $750,000.
- 4On 1 July 20X5, the property is remeasured to $800,000, and a $50,000 gain is recognised in other comprehensive income. The deemed cost of the owner-occupied property is $800,000.
Correct answer
On 1 July 20X5, the property is remeasured to $800,000, and a $50,000 gain is recognised in profit or loss. The deemed cost of the owner-occupied property is $800,000.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Investment Property (IAS 40) MCQs →Want more practice questions on Investment Property (IAS 40)?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Investment Property (IAS 40)