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US GAAP | IFRS |
There is no specific definition of investment property.
The historical-cost model is used for most real estate companies and operating companies holding investment-type property.
Investor entities—such as many investment companies, insurance companies’ separate accounts, bank-sponsored real estate trusts, and employee benefit plans that invest in real estate—carry their investments at fair value.
| Investment property is separately defined as property (land and/or buildings) held in order to earn rentals and/or for capital appreciation. The definition does not include owner-occupied property, property held for sale in the ordinary course of business, or property being constructed or developed for such sale. Properties under construction or development for future use as investment properties are within the scope of investment properties.
Investment property is initially measured at cost (transaction costs are included). Thereafter, it may be accounted for on a historical-cost basis or on a fair value basis as an accounting policy election. If an entity elects the historical-cost model, the entity would need to disclose the fair value of the investment property. When fair value is applied, the gain or loss arising from a change in the fair value is recognized in the income statement. The carrying amount is not depreciated.
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