Disposal

An investment property should be derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.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 as income or expense in the income statement. [IAS 40.66 and 40.69] Compensation from third parties is recognised when it becomes receivable. [IAS 40.72]

Disclosure

Both Fair Value Model and Cost Model [IAS 40.75]

• whether the fair value or the cost model is used
• If the fair value model is used, whether property interests held under operating leases are classified and accounted for as 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 (including repairs and maintenance) arising from investment property that generated rental income during the period
  • direct operating expenses (including repairs and maintenance) arising from investment property that did not generate rental income during the period
  • the cumulative change in fair value recognised in profit or loss on a sale from a pool of assets in which the cost model is used into a pool in which the fair value model is used
• 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

Additional Disclosures for the Fair Value Model [IAS 40.76]

• A reconciliation between the carrying amounts of investment property at the beginning and end of the period, showing additions, disposals, fair value adjustments, net foreign exchange differences, transfers to and from inventories and owner-occupied property, and other changes [IAS 40.76]
• Significant adjustments to an outside valuation (if any) [IAS 40.77]
• If an entity that otherwise uses the fair value model measures an item of investment property using the cost model, certain additional disclosures are required [IAS 40.78]

Additional Disclosures for the Cost Model [IAS 40.79]

• 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, showing additions, disposals, depreciation, impairment recognised or reversed, foreign exchange differences, transfers to and from inventories and owner-occupied property, and other changes
• The fair value of investment property. If the fair value of an item of investment property cannot be measured reliably, additional disclosures are required, including, if possible, the range of estimates within which fair value is highly likely to lie