MEANING & TREATMENT OF INVESTMENT PROPERTIES – CA V G S Mani

MEANING OF INVESTMENT PROPERTY

  • Investment in land or buildings held for earning rentals or capital appreciations are called investment properties
  • Investment properties are classified as long term investments

TREATMENT OF INVESTMENT PROPERTY

  • Since Investment properties are classified as Long Term Investments, they are to be valued at cost.
  • Therefore, we may assume that depreciation should not be provided on Investment properties.
  • However, if there is a decline in the value of Long term investment, and if such decline is “Non-temporary”, then recognize the decline.
  • Therefore, depreciation should be compulsorily provided on “Investment Properties” as depreciation is not a temporary decline.

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