Accounting Policies and Options in Real Estate Investments

This set of flashcards covers critical vocabulary and concepts related to accounting policies and options in the context of real estate investments.

Initial Measurement

The assessment for real estate investments at recognition is done at cost, including transaction costs.

Fair Value Model

Investments must be assessed at fair value reflecting market conditions at the end of the reporting period.

Investment Property

Property held to earn rentals or for capital appreciation, not for use in the production or supply of goods or services.

Subsequent Measurement

Post-recognition evaluation of investments can be at either fair value or cost, consistently applied.

Transaction Costs

Costs directly attributable to the acquisition of a real estate investment, included in initial measurement.

Impairment Loss

Losses recognized due to the decline in the recoverable amount of an asset, affecting its carrying amount.

Deregistration of Investment

An investment property is removed from the balance sheet upon disposal or when no future economic benefits are expected.

Investment Property Classification Changes

Transfers between categories must be evidenced by a change in use.

Fair Value Determination

The best indication is provided by current prices on an active market for similar properties.

Subsequent Expenditure

Subsequent costs should be capitalized only if they meet general recognition criteria.