guide to Investment Properties

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SSAP 19 Accounting for Investment Properties is an old standard but is still very relevant to today’s profession, explains Steve Collings.

It deals with how an entity should account for property which it holds for investment purposes, as opposed to properties which it owns for use in the ordinary course of business. This article will give a brief overview of some of the main requirements under SSAP 19 and look at how it differs with that of its international counterpart, IAS 40 Investment Property.

SSAP 19 defines investment property as an interest in land and/or buildings where:

  • the construction work and development have been completed
  • the interest is held for its investment potential, with any rental income being negotiated at arm’s length


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About Steven Collings


Steve Collings, FMAAT FCCA is the audit and technical partner at Leavitt Walmsley Associates Ltd where Steve trained and qualified.


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28th Jul 2011 18:16

Couple of points to add

As always a comprehensive and thought-provoking article, Steve.

I would just make a couple of points. Under IFRS it is a straight choice of policy between fair value and cost models - it matters not whether fair value is obtainable without undue cost or effort.

It may also be worth noting that where IFRS is used in statutory financial statements of individual group companies a property let to a fellow group company is an investment property (though on consolidation it is not). UK GAAP excludes properties from SSAP 19 unless they are let to third parties.

Hope this helps.


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28th Jul 2011 20:08

Thanks Malcolm

Many thanks for clarifying that Malcolm - it's a very good point actually because, yes, IAS 40 does allow the option of cost OR fair value but where you do state at cost you still have to disclose the property's fair value in the notes, so really you're damned if you do and damned if you don't in terms of obtaining market values.  You have to get a market value if you want to state it at fair value in the statement of financial position (balance sheet) then again you still have to get one even if carried at depreciated historic cost to disclose in the notes, so my opinion is that it's probably best to state at fair value from the off.  My wording in the article came from the IASBs "interpretation" of when cost should only be used for investment property (i.e. because of undue cost or effort) but it does seem like they're giving with one hand and taking with the other!!

In comparison with a similar standard, IAS 16 (Property, plant and equipment) also offers depreciated historic cost vs fair value.  That standard encourages (but doesn't mandate) the preparer to disclose fair values only when they are materially different than the assets' carrying value in the SFP (balance sheet), so it is understandable some clients under IFRS will get quite confused to say the least!

All the best


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07th Oct 2015 11:46

Investment Properties Revaluation


Good morning!

I have just joined the web site after looking for articles regarding IAS 40 and the differing treatment of gains / losses on revaluation. I am semi retired and presently I lecture in accounting mainly to HNC / HND students.   One unit dealing with standards is still focusing on SSAP 19 and I have been taking the students through the differences in the two standards and how these are reflected in financial statements.   An interesting extension to the comparison is to now to bring in the changes to UK GAAP of FRS 102, which appears to supersede the old SSAPs  that were still in force.  FRS 102 appears to align itself with the international standard, although treatment of gains and losses within a revaluation reserve is not mentioned nor, however, is the carrying of them directly to P&L (Statement of Income).  Does this leave a choice?  

It is interesting to an "old" accountant, who was around and qualifying when SSAPs were being developed and brought in, to see how far standards generally have taken the profession and how interpretation and re-interpretation continues some forty+ years later.   FRS 102 has even taken me back to a balance sheet that lists assets on one side and liabilities on the other (although not back to a horizontal format!).  Where to next?



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