Investment property

In this lesson

1. 0:00 Investment property overview
2. 1:13 Recognition criteria and asset definition
3. 2:18 Initial measurement and purchase price
4. 2:47 Subsequent measurement models explained
5. 3:54 Transferring assets between categories
6. 5:26 Transfer from investment property to PPE
7. 6:52 Worked example: PPE to investment property
8. 10:16 Disposal and derecognition of investment property

About this lesson

You'll explore the definition of investment property (assets held for rental income or capital appreciation rather than operational use), the two measurement models available to you (historic cost or fair value), and how to handle transfers when an asset changes purpose—such as when a company stops using a building operationally and begins renting it out. The video walks you through the recognition criteria and initial measurement principles, then focuses on subsequent measurement using both the cost model and fair value model, explaining why the fair value approach is often more logical for investment properties since they have no intended useful life. You'll work through a detailed worked example involving a property transfer from PPE to investment property, calculating depreciation up to the point of transfer, applying revaluation, and recording the revaluation surplus correctly in equity. The lesson also covers transfers in the opposite direction and disposal accounting, ensuring you can handle all the practical scenarios you're likely to encounter in your Financial Reporting or Strategic Business Reporting exams.

Duration: 11m