Property Investment as Operational Buildings
July 20th 2010 -
International standards differ in effect operational buildings that are occupied by their owners as a working tool (IAS 16) Investment properties are generally rented to third parties. Under IAS 40 defines investment property as property held to earn rentals and / or capital appreciation. An investment property generates cash flows largely independent of other assets held by the company. This standard therefore particularly real estate companies, financial institutions or insurance, but not exclusively as it relates to all companies that give their building lease to third parties.
Thus, an investment property are:
- Land held in order to develop a long-term capital, rather than a short term sales in the ordinary course of business,
- Land held for future use which is indeterminate
- A property company owned and leased to third parties through one or more leases,
- Property held by the company under a finance lease and rented to others in the context of one or more leases,
- A building that is vacant but is held to be leased out under one or more leases.
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Tags: operational buildings, Property Investment
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