Asked by aubry castro on Jul 16, 2024
Verified
With regards to land used for agricultural purposes, increases in fair value over cost is recognised in equity when the land is:
A) an investment property measured at cost and accounted for under AASB 140/IAS 40.
B) an investment property measured at fair value and accounted for under AASB 140/IAS 40.
C) not an investment property, is measured at cost and accounted for under AASB 116/IAS 16.
D) not an investment property, is measured at fair value and accounted for under AASB 116/IAS 16.
Investment Property
Real estate property that has been purchased with the intention of earning a return on the investment through rental income, the future resale of the property, or both.
AASB 140
The Australian Accounting Standards Board regulation relating to the accounting for investment property.
IAS 40
A standard issued by the International Accounting Standards Board related to the accounting for investment property.
- Comprehend the accounting processes for land in agricultural activity and its measurement thereafter.
Verified Answer
AA
Amber AgustinJul 18, 2024
Final Answer :
D
Explanation :
Increases in fair value over cost for land that is not classified as investment property and is measured at fair value are recognised in equity. This is in line with AASB 116/IAS 16, which allows for such revaluation increases to be credited directly to equity under the revaluation surplus.
Learning Objectives
- Comprehend the accounting processes for land in agricultural activity and its measurement thereafter.