IAS 40 Investment property

Topics hide Landlord Lease payments 1. Overview 2 Fixed and in-substance fixed payments 3 Variable lease payments 3.1 Payments that depend on an index or rate 3.2 Variable payments other than those that depend on an index or rate 4 Lease incentives Landlord Lease payments Distinguishing between fixed and variable lease payments will impact the … Read more

Topics hide Landlord Lease modifications / Rental modifications 1 Modifications to operating leases – General considerations 2. Modifications to operating leases related to COVID-19 3 Changes to operating leases that are not lease modifications 4 Changes to operating leases that are not lease modifications 5 Modifications to finance leases 5.1 Separate lease 5.2 Not a … Read more

Sub-leases of real estate New classification guidance means that more sub-leases are finance leases under IFRS 16 than previously, impacting the financial position and financial performance of intermediate landlords. A sub-lease is a transaction in which a lessee (or ‘intermediate lessor’) grants a right to use the underlying asset to a third party, and the … Read more

Topics hide Landlord lease definition 1 Overview 3 Typical real estate arrangements Landlord lease definition Identifying a lease of real estate is usually straightforward – but some scenarios will require judgement. 1 Overview A lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for … Read more

Topics hide Sale-and-leaseback of real estate Sale-and-leaseback Buyer-landlord Seller-tenant Case – Buyer-landlord accounting for a sale-and-leaseback transaction when transfer is a sale Case – Buyer-landlord accounting for a sale-and-leaseback transaction when transfer is not a sale Food for thought – How does a buyer-landlord assess whether a transaction qualifies for sale-and-leaseback accounting? Food for thought … Read more

Topics hide Leased investment property Food for thought – How does the accounting for leased investment properties differ under IFRS 16? Food for thought – Are there special rules for accounting for right-of-use investment property? Food for thought – How does a landlord apply the fair value model to a right-of-use asset? Leased investment property … Read more

Topics hide Separate lease and non-lease components 1 Overview 2 Typical lease components in real estate contracts Typical lease components 2.1 Additional considerations for leases of land and buildings for landlords 3 Common area maintenance and other non-lease components 4 Property taxes and insurance 5 Allocation of consideration to lease and non-lease 6 Allocation of … Read more

Topics hide Landlord Lease term 1 Overview of landlord lease term 2 Non-cancellable period 4 Reasonably certain threshold 5 Renewable and cancellable leases – Application issues 6 Changes in the lease term Landlord Lease term New guidance on lease term could impact the period over which operating lease incentives are recognised in profit or loss, … Read more

Topics hide Landlord accounting model 1 Overview 2 Lease classification 3 Operating lease model 4 Finance lease model Landlord accounting model Landlords continue to classify leases as finance or operating leases, and continue to classify many real estate leases as operating leases. 1 Overview The lessor follows a dual accounting approach for lease accounting. The … Read more