Economics · Accounting Standards
Under accounting standards, subsequent to initial recognition, investment properties held at fair value are not depreciated. Which of the following is a valid justification for this treatment compared to property, plant, and equipment?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Investment properties do not generate income to match against any depreciation expense.
- 2It is impossible to reliably measure the useful life of an investment property.
- 3Investment properties are completely immune to any decreases in value.
- 4An investment property is likely to increase in value, meaning its residual value would be greater than or equal to its carrying amount.✓
Correct answer
An investment property is likely to increase in value, meaning its residual value would be greater than or equal to its carrying amount.
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