CAF-1 · Chapter 4 · Question 5 of 15
If a company owns a building and leases it out to an independent third party under an operating lease, how is it classified?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) As investment property.
Explanation
A building owned by the entity and leased out under one or more operating leases is a classic example of investment property.
More IAS 40 Investment Property MCQs
- Q7Under IAS 40, which of the following of the following costs should NOT be included in the initial cost of an investment property?
- Q8Under the fair value model for investment property, how are changes in fair value treated?
- Q9If an entity chooses the cost model for its investment properties, what must it still disclose?
- Q10When an entity transfers an investment property carried at fair value to owner-occupied property (PPE), what is the deemed cost for…
- Q11An entity transfers an owner-occupied property to investment property to be carried at fair value. At the transfer date, the fair value…