IAS 40 Investment Property

May 9, 2026

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This document outlines IAS 40, which deals with Investment Property, defined as land or buildings held to earn rentals or for capital appreciation, or both. It details the scope and application of IAS 40 by categorizing different types of property and their corresponding applicable accounting standards. For instance, property bought for routine resale falls under IAS 2, while property bought for use in business is governed by IAS 16. Construction of property for a third party is under IFRS 15, and for the owner's future occupied use or future investment property is under IAS 16 and IAS 40, respectively. Land bought but not yet decided by management is also captured by IAS 40. The document further clarifies the dual use of property, stating that if portions can be sold separately, separate lease papers and standards (IAS 40 for rented, IAS 16 for owned) apply to each portion. If not separable, an assessment is needed based on which portion is earning rent. Ancillary services are also considered: if insignificant and rental income is major, IAS 40 applies to the complete property (e.g., Dolmen Mall). If ancillary services are significant in comparison to rental income, IAS 16 applies (e.g., Hotels), considering income from services beyond rooms.

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May 9, 2026