The IASB has amended the requirements in IAS 40 Investment property on when a company should transfer a property asset to, or from, investment property.
“Evidence, not intention, is key – and different types of evidence may support a transfer”
Brian O’Donovan, KPMG’s global IFRS investment property leader
A transfer is made when and only when there is an actual change in use – i.e. an asset meets or ceases to meet the definition of investment property and there is evidence of the change in use. A change in management intention alone does not support a transfer.
The revised examples of evidence of a change in use included in the amended version of IAS 40 are not exhaustive – i.e. other forms of evidence may support a transfer.
The amendments apply for annual periods beginning on or after 1 January 2018. Early adoption is permitted.
A company has a choice on transition to apply:
For more information on the amendments, speak to your usual KPMG contact.
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