Investment Property

Investment Property

Investment property is a property kept to earn rental income from it or for the purpose of capital gain, however, it does include the property held for own use or sale.
Accounting Treatment of Investment Property.

Accounting Treatment of Investment Properties

1. Initial Recognition

Initially the investment property is recognized at cost. 

2. Subsequent Recognition

Subsequently the investment property may be recognized at cost of at fair value. 

a.Cost Model

When property is recognized under cost model depreciation is charged and property is shown in balance sheet at carrying amount. 

b. Fair Value Model

When investment property is valued at fair value then no depreciation is charged and increase or decrease in fair value is charged to profit and loss account.