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Property held for sale is temporarily being rented out, does it need to be classified as IAS 40?

I have a property which is held for sale in the normal course of business (IAS2), however due to a slow rental market I am renting out the property short term until i can find a buyer. Do i need to move the asset from IAS 2 (inventory) to IAS 40 (investment property?

asked Nov 30, 2017 in IAS 40 - Investment Property by NattySide

1 Answer

0 votes
Refer to IAS 40 that says ..transfers to, or from, investment property shall be made when, and only when, there is a change in use, evidenced by:

(a) commencement of owner-occupation, for a transfer from investment property to owner-occupied property;

(b) commencement of development with a view to sale, for a transfer from investment property to inventories;

(C) end of owner-occupation, for a transfer from owner-occupied property to investment property; or

(d) commencement of an operating lease to another party, for a transfer from inventories to investment property.

If you believe renting out wouldn't last long more than a year, then I think you are not required to recognize investment property. If not yes.
answered Dec 3, 2017 by anonymous