CAF-1 · Chapter 4 · Question 1 of 15
Which of the following properties owned by a company would be classified as an investment property under IAS 40?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A building held for long-term capital appreciation rather than short-term sale.
Explanation
Investment property is held to earn rentals, for capital appreciation, or both. Owner-occupied properties (including employee-occupied and future headquarters) are classified as PPE under IAS 16.
More IAS 40 Investment Property MCQs
- Q3An entity owns a multi-story building. It occupies 5% of the space for its own administrative offices and leases out the remaining 95% to…
- Q4Which of the following properties is classified as an investment property under IAS 40?
- Q5If a company owns a building and leases it out to an independent third party under an operating lease, how is it classified?
- Q6How should an entity account for a property that has both an investment property portion and an owner-occupied portion, if the portions…
- Q7Under IAS 40, which of the following of the following costs should NOT be included in the initial cost of an investment property?