Subsequent measurement: Cost model 29 3.4. Cost less Accumulated Depreciation less Accumulated impairment loss. 2.1 Investment Property, Cost Model and Fair Value Model MFRS 140 – Investment property was issued by Malaysian Accounting Standards Board (MASB) on 19 November 2011 and applicable for annual period beginning 1 January 2012. Under the cost model, the standard states that the asset should be accounted for in line with the cost model laid out in IAS16. Dr. MFRS116 PPE/MFRS 116 Building RM 3,500,000. FRS 140: Investment Property 5 Solution: The cost of the building for property development business is initially recognized as cost of investment, i.e. Fair value measurement of investment property: IFRS 13 38 3.7. MFRS140 Investment property/MFRS 140 RM 4,000,000 Building. Change in use of assets: transfers into and out of investment property 45 4. Fair Value Model: First-time adoption. fair value model or cost model for all investment property backing liabilities that pay a return linked directly to the fair value of, or returns from, specific assets. Except for, it can be classified as investment property and the fair value model is used (option 4). Both MPSAS 16 and MFRS 140 have some additional requirements on disclosure compared to Section 16 of MPERS. Accumulated depreciation 500,000 Cr. FRS 102, paragraph 16.3 also states that a property interest which is held by a lessee under an operating lease may be classified and accounted for as investment property if, and only if, the property would otherwise meet the definition of an investment property and the lessee can measure the fair value of the property interest on an on-going basis. ... and MFRS 140 have some additional requirements on disclosure compared to Section 16 of MPERS. Example: Transfer from MFRS140 Property to MFRS116 Property IP measured based on cost model. As such, the company has to account it at fair value of RM800,000 when the said building is transferred from investment property to inventory in the year ended 31 December 2009. RM500,000. Replacement of parts of investment property and subsequent expenditure 28 3.3. General requirements in relation to first-time adoption in relation to investment property are as follows: MFRS 16 8 This means that, in preparing its first MFRS financial statements, the first-time adopter shall refer to the provisions contained in MFRS 1 on matters relating to transition and effective dates instead of the transitional provision and effective date contained in the respective MFRSs. MFRS 140 Malaysian Financial Reporting Standard 140 Investment Property In November 2011 the Malaysian Accounting Standards Subsequent measurement: Fair value model 36 3.6. MPSAS 16, MFRS 140 and Section 16 of MPERS have some similar requirements in relation to disclosure. The buildings element should be recognised under IAS 16 (option 1 and 2) if it is owner occupied or under IAS 40 (option 3 and 4) if it is used for rental earned. Journal entries on 1 January 2014 – date of transfer. View MFRS 140 042015 from MM 210 at United States Merchant Marine Academy. Dr. Cost Model: The entity which chooses Cost model to account for its Investment Property after initial recognition, will measure the investment Property as per Cost Model rules prescribed in IAS 16 i.e. This differs from 3.2. Hence, investment property should … OR Impairment 32 3.5.