Summary of IAS 40 Investment Property

1. IAS 40 INVESTMENT PROPERTY 9/14/2009 1 IAS 40 Investment Property

2. OBJECTIVE & SCOPE Recognition, measurement & disclosure Matters excluded Investment property Investment property under finance lease in lesee’s FS Investment property under operating lease in lessor’s FS Classification of leases Lease income from investment property Operating leases in lessee’s financial statements Finance lease in lessor’s FS Sale and leaseback transactions Disclosure of finance and operating leases Biological assets Mineral rights and reserves 9/14/2009 2 IAS 40 Investment Property

3. Definitions 9/14/2009 3 IAS 40 Investment Property

4. Definitions 9/14/2009 4 IAS 40 Investment Property

5. Classification alternative 9/14/2009 5 IAS 40 Investment Property

6. Examples of investment property 9/14/2009 6 IAS 40 Investment Property

7. Combinations and ancillary services 9/14/2009 IAS 40 Investment Property 7

8. Recognition 9/14/2009 IAS 40 Investment Property 8

9. Measurement at recognition 9/14/2009 IAS 40 Investment Property 9

10. Exclude from cost at recognition 9/14/2009 IAS 40 Investment Property 10

11. Investment property held under a lease 9/14/2009 IAS 40 Investment Property 11

12. Investment property exchanged for another asset Fair value of asset given up unless FV of asset received more clearly evident Carrying value of asset given up 9/14/2009 IAS 40 Investment Property 12

13. Measurement after recognition: Accounting Policy 9/14/2009 IAS 40 Investment Property 13

14. Fair Value 9/14/2009 IAS 40 Investment Property 14

15. Fair Value Model 9/14/2009 IAS 40 Investment Property 15 Measure all investment properties at fair value Investment under operating lease may not be measured at cost after initial recognition; it must be measured at fair value Recognise gains and losses from changes in fair value in the profit and loss account until disposal Once held for sale, measure investment property according to IFRS 5 Fair value must reflect market conditions at the balance sheet date Current prices in active market for similar property in same location and condition under similar lease or other contract Current/recent prices adjusted to reflect differences If reasonable estimate of fair value not available for a particular property, use IAS 16 cost model in exceptional cases Residual value must be zero Apply IAS 16 cost model until disposal

16. Transfers to and from investment property 9/14/2009 IAS 40 Investment Property 16

17. Disposals 9/14/2009 IAS 40 Investment Property 17 Derecognise from balance sheet when no future economic benefit expected Net disposal proceeds – carrying amount = profit/loss in period of disposal Ias 17 for sale and leaseback Recognise compensation for impairment or loss in profit & loss when receivable

18. Disclosure: Fair Value Model & Cost Model 9/14/2009 IAS 40 Investment Property 18

19. Disclosure: Fair Value Model and Cost Model 9/14/2009 IAS 40 Investment Property 19

20. Cost model: Additional disclosure 9/14/2009 IAS 40 Investment Property 20 Depreciation methods used Useful lives Gross carrying amount Accumulated depreciation and impairment loss at beginning and end of period Reconciliation of carrying amount at beginning and end of period Additions From subsequent expenditure From acquisitions Assets classified as held for sale Depreciation Impairment loss recognised and reversed Net exchange differences on translation Transfers to and from inventories and owner-occupied property Fair value of investment property or Description of property Reason why fair value cannot be determined Range of estimates in which fair value is likely to lie

21. Fair value model: Additional disclosure 9/14/2009 IAS 40 Investment Property 21 Reconciliation between carrying amount at beginning and end of period Additions From acquisition From subsequent expenditure From acquisitions through business combinations Assets classified as held for sale Net gain or loss from fair value adjustments Net exchange difference on translation Transfer to and from inventories and owner-occupied property Other changes

22. Transitional provisions 9/14/2009 IAS 40 Investment Property 22 Apply initial measurement in exchange of assets prospectively to future transactions only. Entity elects for the first time to classify all eligible property under operating lease as investment property Adjust opening balance of retained earnings in period election first made If no fair value previously disclosed, do not adjust opening balance of retained earnings for earlier period or restate comparatives If fair value previously disclosed, encouraged but not required to: Adjust opening balance of retained earnings for earliest period presented Restate comparative information for those periods

23. Summary 9/14/2009 IAS 40 Investment Property 23 Investment property is held for rent or capital appreciation Measure initially at cost including transactions costs Choose fair value or cost model after initial recognition and apply to all properties Recognise all investment property under operating lease at fair value after recognition Recognise changes in fair value in profit & loss for the period Classify according to IFRS 5 once held for sale Transfer when investment property becomes owner-occupied or used in another way Derecognise when disposed and recognise profit or loss on disposal Make detailed disclosures and reconciliations of opening and closing carrying values