Value of Property Asset
July 26th 2010 -
At subsequent evaluations, the company can choose between two methods of accounting: it may be the historical cost or fair value. When the choice is final, the methodology applies to all investment property, without exception.
When the company chose the model of fair value, it should apply to all of its investment properties. There is an exception where the company following the acquisition or completion of the building, is unable to reliably determine the fair value and continues the investment property. It must then use the treatment amortized historical cost, assuming a zero residual value. The amortized cost method is used for this building until the date of transfer, even if the fair value can be estimated reliably and continues later. A building that is valued at fair value will be until disposal or change of assignment, even if comparable market transactions become less frequent or market prices become less available.
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Methods for Evaluating Investment Property | 3 Days Business Guide Says:
July 29th, 2010 at 6:15 pm
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