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FRS 105 investment property accounting treatment

question about how to account for investment property under FRS 105

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I have just taken on a client who has a property mangement company. The company has one property on the balance sheet.

The company meets the criteria of micro entity accounts and the accounts will be filed under FRS 105.

It is my understanding that investment property under FRS 105 must be recognised under the cost model.

My question is - should the property be recognised at cost at the year end, or cost less depreciation?

Thanks in advance

 

Replies (14)

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By johnt27
08th Mar 2021 12:26

FRS 105 is very clear on this - it's cost less depreciation. What that depreciation charge looks like will depend on your interpretation of the rest of FRS 105.

Why an investment company would choose FRS 105 is another question...

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Replying to johnt27:
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By chrisbb99
08th Mar 2021 13:02

Thank you John.

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By paul.benny
08th Mar 2021 12:37

And if you're in any doubt, the FRS105 (and FRS102) can be freely downloaded from the FRC website.

And why can't people who claim to be accountants look this stuff up for themselves? It's hardly difficult

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Replying to paul.benny:
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By Tax Dragon
08th Mar 2021 12:39

Also, why do people think this forum is a one-way street?

Here was a thread just this morning that the OP might have contributed to: https://www.accountingweb.co.uk/any-answers/1-property-investment-compan...

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Replying to Tax Dragon:
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By chrisbb99
08th Mar 2021 13:01

Thank you Tax Dragon, I will take a look at this.

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Replying to paul.benny:
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By chrisbb99
08th Mar 2021 12:59

"And why can't people who claim to be accountants look this stuff up for themselves? It's hardly difficult"

People can be accountants and also ask questions. Your comment above is unnecessary.

And why can't people who provide advice here be polite about it "It's hardly difficult".

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Replying to chrisbb99:
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By lionofludesch
08th Mar 2021 13:30

chrisbb99 wrote:

And why can't people who provide advice here be polite about it "It's hardly difficult".

I think it's because this forum is descending into "Can somebody look this up for me?"

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Replying to lionofludesch:
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By chrisbb99
08th Mar 2021 14:06

I think it is because this forum is descending into "Can somebody look this up for me?"

This statement would pass muster (to a certain extent) if one had in fact asked for someone else to look it for them. You may imply that to be the case, but you could be wrong, and are wrong in this particular case.

Also, no one is forced to provide an answer, so if they do not wish to help, they could just move on instead of providing negative comments.

Regardless, it is my understanding that this forum is a place for people to ask questions. It should not be a place for people to fire derogatory comments at others, which Paul has subsequently apologised for, and I appreciate.

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Replying to chrisbb99:
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By lionofludesch
08th Mar 2021 14:23

chrisbb99 wrote:

I think it is because this forum is descending into "Can somebody look this up for me?"

This statement would pass muster (to a certain extent) if one had in fact asked for someone else to look it for them.

It's how I interpret your question.

I cannot place any other construction upon it.

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Replying to lionofludesch:
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By chrisbb99
08th Mar 2021 14:44

If that is how you have interpreted my question, I accept your view and that is your prerogative.

However, whatever way it is interpreted, it does not justify snide remarks, or others defending the use of snide remarks, which I hope you are not trying to do.

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Replying to chrisbb99:
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By lionofludesch
08th Mar 2021 17:12

chrisbb99 wrote:

However, whatever way it is interpreted, it does not justify snide remarks, or others defending the use of snide remarks, which I hope you are not trying to do.

I accept your view and that is your prerogative.

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Replying to lionofludesch:
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By chrisbb99
08th Mar 2021 19:43

Thank you

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Replying to chrisbb99:
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By paul.benny
08th Mar 2021 13:33

If you found my (self-acknowledged) rant offensive, then I apologise. It wasn't particularly aimed at you.

For reference - accounting standards available here: https://www.frc.org.uk/accountants/accounting-and-reporting-policy/uk-ac...

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Replying to paul.benny:
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By chrisbb99
08th Mar 2021 13:44

Apology accepted, I appreciate it.

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