Investment Property

Code: 1260
👁 Views: 115

Account Information

Financial Statement Statement of Financial Position
Normal Balance Debit

Definition

Properties held to earn rental income or for capital appreciation, rather than for use in the company’s operations.

Sub-accounts

1261

Investment Property - Building

1262

Investment Property - Land

1263

Accumulated Depreciation - Investment Property

Common Journal Entries

Purchased investment property

Dr. Investment Property
Cr. Bank Account

Received rental income from investment property

Dr. Cash in Hand
Cr. Rental Income

Revaluation of investment property

Dr. Investment Property
Cr. Revaluation Gain

Sold investment property

Dr. Bank Account
Cr. Investment Property
Cr. Gain on Sale

Purchased investment property

Dr. Investment Property
Cr. Bank Account

Received rental income

Dr. Bank Account
Cr. Rental Income

Increase in fair value

Dr. Investment Property
Cr. Fair Value Gain

Related Accounts

Affects Cash and Cash Equivalents

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 40 Investment Property
US GAAP ASC 360 Property, Plant and Equipment
⚠️ Key Difference Between IFRS and US GAAP

IFRS has dedicated IAS 40 with fair value option; GAAP uses cost model only

❓ Frequently Asked Questions

Q: What is investment property?

A: Property (land or buildings) held by the company to earn rentals or for capital appreciation, not for use in operations.

Q: Is investment property depreciated?

A: Under the cost model: yes, buildings only are depreciated. Under the fair value model: no depreciation.

Q: How is rental income from investment property recorded?

A: Dr. Bank or Receivables, Cr. Rental Income - Investment Property.