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Commission Regulation (EC) No
2238/2004 of 29 December 2004 amending Regulation (EC) No 1725/2003
adopting certain international accounting standards in accordance
with Regulation (EC) No 1606/2002 of the European Parliament and of
the Council, as regards IASs IFRS 1, IASs Nos 1 to 10, 12 to 17, 19
to 24, 27 to 38, 40 and 41 and SIC Nos 1 to 7, 11 to 14, 18 to 27
and 30 to 33
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Disclosure
Fair Value Model and
Cost Model
74. The disclosures
below apply in addition to those in IAS 17. In accordance with
IAS 17, the owner of an investment property provides lessors’
disclosures about leases into which it has entered. An entity
that holds an investment property under a finance or operating
lease provides lessees’ disclosures for finance leases and
lessors’ disclosures for any operating leases into which it
has entered.
75. An entity shall
disclose:
(a) whether it
applies the fair value model or the cost model.
(b) if it applies
the fair value model, whether, and in what circumstances,
property interests held under operating leases are
classified and accounted for as investment property.
(c) when
classification is difficult (see paragraph 14), the criteria
it uses to distinguish investment property from
owner-occupied
property and from property held for sale in the
ordinary course of business.
(d) the methods and
significant assumptions applied in determining
the fair value of investment property, including a
statement
whether the determination of fair value was supported
by market evidence or was more heavily based on other
factors (which the entity shall disclose) because of the
nature of the property and lack of comparable market
data.
(e) the extent to
which the fair value of investment property (as measured
or disclosed in the financial statements) is based on
a
valuation by an independent valuer who holds a recognised
and relevant professional qualification and has recent
experience in the location and category of the
investment property being valued. If there has
been no such valuation, that fact shall be
disclosed.
(f) the amounts
recognised in profit or loss for:
(i) rental income
from investment property;
(ii) direct
operating expenses (including repairs and maintenance)
arising from investment property that generated
rental income during the period; and
(iii) direct
operating expenses (including repairs and maintenance)
arising from investment property that did not
generate rental income during the period.
(iv) the cumulative change in fair value recognised in
profit or loss on a sale of investment property from a
pool of assets in which the cost model is used into a pool
in which the fair value model is used (see paragraph
32C).
(g) the existence
and amounts of restrictions on the realisability
of
investment property or the remittance of income and
proceeds
of disposal.
(h) contractual
obligations to purchase, construct or develop investment
property or for repairs, maintenance or enhancements.
Fair Value Model
76. In addition to
the disclosures required by paragraph 75, an entity that
applies the fair value model in paragraphs 33-55 shall
disclose a reconciliation between the carrying
amounts of investment property at the beginning
and end of the period, showing the following:
(a) additions,
disclosing separately those additions resulting from
acquisitions
and those resulting from subsequent expenditure recognised
in the carrying amount of an asset;
(b) additions
resulting from acquisitions through business combinations;
(c)
assets classified as held for sale or included in a
disposal group classified as held for sale in
accordance with
IFRS 5 and other disposals;
(d) net gains or
losses from fair value adjustments;
(e) the net exchange
differences arising on the translation of the financial
statements into a different presentation currency,
and
on translation of a foreign operation into the presentation
currency of the reporting entity;
(f) transfers to and
from inventories and owner-occupied property;
and
(g) other changes.
77. When a valuation
obtained for investment property is adjusted significantly
for the purpose of the financial statements, for example
to avoid double-counting of assets or liabilities that
are recognised as separate assets and
liabilities as described in paragraph 50, the entity
shall disclose a reconciliation between the valuation obtained
and the adjusted valuation included in the financial
statements, showing separately the aggregate
amount of any recognised lease obligations that
have been added back, and any other significant adjustments.
78. In the
exceptional cases referred to in paragraph 53, when an entity
measures investment property using the cost model in IAS
16, the reconciliation required by paragraph 76
shall disclose amounts relating to that
investment property separately from amounts relating
to other investment property. In addition, an entity shall
disclose:
(a) a description of
the investment property;
(b) an explanation
of why fair value cannot be determined reliably;
(c) if possible, the
range of estimates within which fair value is highly
likely to lie; and
(d) on disposal of
investment property not carried at fair value:
(i) the fact that
the entity has disposed of investment property
not carried at fair value;
(ii) the carrying
amount of that investment property at the time
of sale; and
(iii) the amount of
gain or loss recognised.
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