IAS-40 defines investment property as a property (land or a building or a part of a building or both) held by the owner (or lessee under a finance lease) to earn rentals or for capital appreciation or both.
From the above definition it is clear that only land or building can be classified as investment property and land and building should be held for earning rentals or capital appreciation purposes. All other non-current assets should be classified as fixed assets.
For second part of the question regarding difference in profits, if the assets are subsequently measured under cost method, as such there is no difference in profits shown in each year of life of the asset. However. if the asset is subsequently measured at revaluation model, there could be a difference in profits on year to year basis. As per IAS-40 revaluation gain of an investment property is recognized and profit in profit and loss account of the current period. Whereas, as per IAS-16 revaluation gain of a fixed asset is recognized and other comprehensive income in the year of its arising and is only transferred to profit and loss account upon its disposal.
is property (land or a building or part of a building or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both. [IAS 40.5]
is property (land or a building or part of a building or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both. [IAS 40.5]
