Investment Property - Land

Code: 1262
👁 Views: 99

Account Information

Financial Statement Statement of Financial Position
Normal Balance Debit

Definition

Land held for investment purposes to generate capital appreciation over the long term or to earn rental income, and not used in the company’s operating activities. It is classified as investment property under applicable accounting standards and is managed to generate investment returns rather than to support day-to-day operations.

Common Journal Entries

Purchased long term investment

Dr. Long Term Investments
Cr. Bank Account

Received long term investment dividends

Dr. Bank Account
Cr. Investment Income

Sold long term investment at a gain

Dr. Bank Account
Cr. Long Term Investments
Cr. Gain on Investment Sale

Reclassified to short term investment

Dr. Short Term Investments
Cr. Long Term Investments

📐 IFRS vs US GAAP Accounting Treatment

IFRS IFRS 9 Financial Instruments
US GAAP ASC 321 Investments - Equity Securities

❓ Frequently Asked Questions

Q: Is investment land depreciated?

A: No, land is not depreciated whether investment or operational.