Hi
The company I am working on are a property management company. They own multiple plots of freehold land to which they receive annual ground rent. Because they have this freehold land they are obviously responsible for the management of the flats built on the land which they manage themselves as oppose to outsourcing the management to which they charge a management fee for. Therefore income is 2 fold in the company 1.Annual Ground Rent 2.Management Fee's.
This is the first year I have looked at the accounts and historically this has been shown on the balance sheet as freehold property, this freehold land is not used for personal use of any kind. Should this actually be held as an investment property under current FRSSE, I am aware investment properties are one of the key areas of the upcoming FRS102 standard also, but for the current FRSSE?
thanks
Replies (6)
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Is this a typical flat management company where all the shareholders are leaseholders? If so it does not seem to me that the property is held by the company for investment purposes.