(Summary) Ind AS 40

Investment Property

Is to prescribe accounting treatment for Investment property and related disclosure requirements.

Applicable in the recognition, measurement and disclosure of investment property.

Ind AS


Ind AS 41


Ind AS 16

Property, Plant and Equipment

Mineral rights and mineral reserves

  1. Investment property
  2. Owner-occupied property

Investment property: Property held to earn rentals or for capital appreciation or both, rather than for:

  1. Use in the production or supply of goods or services or for administrative purposes; or
  2. Sale in the ordinary course of business.

Investment property should be recognised as an asset when it is probable that the future economic benefits that are associated with the property will flow to the entity, and the cost of the property can be reliably measured.

Investment property is initially measured at cost, including transaction costs. Such cost should not include start-up costs, abnormal waste, or operating losses incurred before the investment property achieves the planned level of occupancy.

An entity shall adopt COST Model as its accounting policy.






Commencement of owner-occupation

Investment property

Owner-occupied property

Commencement of development with a view to sale

Investment property Inventories

End of owner-occupation

Owner-occupied property

Investment property

Commencement of an operating lease to another party


Investment property

  • An investment property should be derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.
  • The gain or loss on disposal should be calculated as the difference between the net disposal proceeds and the carrying amount of the asset and should be recognised in profit or loss in the period of disposal.
  • Compensation from third parties is recognised when it becomes receivable.

Disclosures apply in addition to those in Ind AS 17.

  • Accounting policy for measurement of investment property
  • If classification is difficult, the criteria to distinguish investment property from owner-occupied property and from property held for sale
  • The extent to which the fair value of investment property is based on a valuation by a qualified independent valuer; if there has been no such valuation, that fact must be disclosed.
  • The amounts recognised in profit or loss for:
  • Rental income from investment property
  • Direct operating expenses arising from investment property that generated rental income during the period
  • Direct operating expenses arising from investment property that did not generate rental income during the period
  • Restrictions on the realisability of investment property or the remittance of income and proceeds of disposal
  • Contractual obligations to purchase, construct, or develop investment property or for repairs, maintenance or enhancements.
  • The depreciation methods used
  • The useful lives or the depreciation rates used
  • The gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period
  • A reconciliation of the carrying amount of investment property at the beginning and end of the period.
  • The fair value of investment property. If the fair value of an item of investment property cannot be measured reliably, additional disclosures are required.


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