A financial liability is derecognized with the discharge, cancellation or5fdf0d32e05ba5fdf0d333d6b0 of the contractual obligation or when its terms are substantially modified. An investment property shall be derecognized: on disposal or; when no benefit is expected from future use or disposal. Investment Property IAS 40 Investment Property IAS 40 Definition Investment property is property (land or a building) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for:use in the production or supply of goods or services… c) An investment property shall be derecognized from entity’ statement of financial position on disposal or when the investment property is no longer can provide future economic benefits. Compute the revaluation loss and state how it should be treated in the financial statements. Derecognition of financial assets under IFRS 9, transfers of all risks and rewards, pass-through transfers and other points. Likewise, upon disposal, the standard state that an item of investment property should be derecognized, which simply is to eliminate the item from the Statement of Financial Position. Definitions •Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A disposal may be achieved by the sale of the property or leasing it by means of finance lease. Any gain or loss is determined as the difference between the net disposal proceeds and the carrying amount is recognized in the income statement. An entity derecognizes a transferred financial asset if it has transferred substantially all of the risks and rewards of ownership or control of the financial asset. Gain or Loss on Disposal. removed from the Statement of Financial Position) on disposal, or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. Its fair value had fallen to $1.5m. CHAPTER 9_INVESTMENT PROPERTY - View presentation slides online. •Investment property is property (land or a building—or part of a building—or both) held (by the owner or by the lessee as a right-of use asset) to earn rentals or The property referred to in Example 1 was revalued on 31 December 20X6. An investment property should be derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. 2016). Financial Accounting And Reporting : Investment Property 0 Download 13 Pages / 3,053 Words Add in library Click this icon and make it bookmark in your library to refer it later. Solution The carrying value of the property at 31 December 20X6 would have been $2.74m ($2.8m - 2 … An investment property is derecognized when it is disposed or permanently withdrawn from use. Disclosure Requirements: Any gain or loss arising on derecognition is recognized in profit or loss (unless in a sale-and-lease-back transaction under IFRS 16). Derecognition is the removal of a previously recognized financial asset or financial liability from an entity's balance sheet.A financial asset should be derecognized if either the entity's contractual rights to the asset's cash flows have expired or the asset has been transferred to a third party (along with the risks and rewards of ownership). GOT IT. ... As such, the items of the plant and equipment are essentially derecognized at the time of disposal (Annualreports.com. The future economic benefits may not attach to entity when it was permanently withdrawn from its use. 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