Ias 40

GoldenRetreiver

Hi, I wondered if anyone can help me please. Our course notes say that with the fair method of valuation the market value of asset is shown in the BS and the difference shown in revaluation reserve. However, the Osborne book says the difference is shown in the income statement. Which one is correct?

Bluewednesday

Under IAS40 Investment properties, any gain or loss is shown in the income statement.

I think the UK standard equivalent show it in a revaluation reserve but under international standards it's in the income statement.

This quote comes from the technical summary of the standard on www.iasb.org

The Standard permits entities to choose either:
(a) a fair value model, under which an investment property is measured, after initial measurement, at fair value with changes in fair value recognised in profit or loss; or
(b) a cost model. The cost model is specified in IAS 16 and requires an investment property to be measured after initial measurement at depreciated cost (less any accumulated impairment losses). An entity that chooses the cost model discloses the fair value of its investment property

If in doubt it's always worth looking at the standard

GoldenRetreiver

Thanks I will have a closer look - I guess it looks like the Osborne book is right and our course notes aren't.
Many thanks, Sally