Investment Property Government Accounting PDF

Investment Property Government Accounting Investment Property – is a property (land or buildings-or part of a building-or both) held to earn rentals, or for capital appreciation or both. Versus Owner-occupied property – is property held (by the owner or by the lessee under a finance lease) for...

Investment Property Government Accounting Investment Property – is a property (land or buildings-or part of a building-or both) held to earn rentals, or for capital appreciation or both. Versus Owner-occupied property – is property held (by the owner or by the lessee under a finance lease) for use in the production or supply of goods or services or for administrative purposes. Cost Model – Initial and After IP shall be measured initially at its cost. Transaction costs shall be included in this initial measurement. Cost includes purchase price and any directly attributable expenditures Acquisition - Cash Purchase Non-exchange Transaction Self-constructed Property If an IP is self-constructed, whether by contract or by administration, all costs related to the construction shall be recognized as “Construction in Progress” while it is not completed. Upon completion, these costs shall be transferred to an “Investment Property” account when the criteria for recognition of such are met. Self-constructed Property Entity A constructed a building intended to earn rent income. Contract price is P11,200,000, inclusive of VAT, payable in two progress billings. Advance payment to contractor is 15% of the contract price while retention fee is 10% of the progress billing.  Self-constructed Property *Initially 2entries of Dr. AP 560K Cr Guaranty/Sec Deposits 560K Installment Transfer Transfers To or From Investment Property. Transfers to or from IP shall be made when, and only when, there is a change in use, as evidenced by the following a. Commencement of owner-occupation, for a transfer from IP to owner- occupied property; b. Commencement of development with a view to sale, for a transfer from IP to inventories; c. End of owner-occupation, for a transfer from owner-occupied property to IP; or d. Commencement of an operating lease (on a commercial basis) to another party, for a transfer from inventories to IP. Derecognition of Investment Property An IP shall be derecognized on disposal or when the IP is permanently withdrawn from use and no future economic benefits or service potential is expected from its disposal. Gains/Losses Compensation of 3rd Parties Impairment An asset is said to be impaired when its carrying amount in the SFP exceeds its recoverable amount due to fall in market value of an asset. Adjusted Depreciation Reversal An entity shall assess whether there is any indication that an impairment loss recognized in prior periods for an asset may no longer exist or may have decreased. If such indication exists, the entity shall estimate the recoverable amount of that asset.