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4- Part 2 - Coggle Diagram

- - - - To earn rentals or
      - For capital appreciation or
      - Both
      - Rather than
        
        Use in the production of G&S or for administrative purpose
        
        Sale in the ordinary course of business
  - - - Initially
        
        Can choose between
        
        Cost model
        
        As usual unless HFS
        
        FV model
        
        Any change in FV reported in P/L, not depreciated
      - Whatever policy chosen, must apply to all of its investment properties
  - - - Happens when property meets or ceases to meet the def. of investment properties and there is evidence of the change in use
      - Management intention for use of property does not provide evidence of a change in use
    - - Investment property to owner occupied/ inventories
        
        Cost for subsequent accounting is FV at date change of use
        
        Apply IAS 16,2 or IFRS 16 as appropriate after date of change
      - Owner occupied to investment property
        
        Apply IAS 16 or IFRS 16 up to date of change
        
        At date of change, property revalued to FV
        
        At date of change, any diff. between the carrying amount under IAS 16 or IFRS 16 and its FV is treated as a revaluation under IAS 16
- - - - Controlled by the entity as a result of past events
      - Something from which the entity expects future economic benefits to flow
    - - It is separable
      - It arises from contractual / legal rights
  - - - Initially, depends on how the asset was acquired or generated
        
        Separate acquisition
        
        Cost
        
        Acquired as part of business combination
        
        IFRS 3
        
        Internally generated goodwill
        
        Not recognised
        
        Internally generated intangible assets
        
        PIRATE
        
        In order to assess whether asset meets criteria, entity classifies asset into
        
        Research phase
        
        Expensed
        
        Development phase
        
        Capitalised if meet all six criteria, otherwise expense
        
        Items not recognised
        
        Start-up. training, advertising, promotional, relocation and reorganisation costs
        
        Mastheads, brands, publishing titles, customer lists and items similar in substance
        
        Fail to meet some of the criteria, indistinguishable from goodwill
        
        Acquired by government grant
        
        Asset and grant at FV or nominal amount plus expenditure directly attributable to preparation for use
      - Costs should only be the one that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing or preparing the asset for its intended use
        
        Sum of expenditure incurred from the date when the IA first meets the recognition criteria
      - Subsequently
        
        Cost or revaluation model
        
        Revaluation model
        
        FV must be able to be measured reliably with reference to an active market
        
        If cannot be revalued due to no active market, the asset should be measured using cost model
        
        Revaluation should be made with much regularity that the CA does not differ from that which would be determined using FV at the year end
        
        The entire class of the same type must be revalued at the same time
  - - - The depreciable amount is allocated on a systematic basis over the UL
      - Residual value is normally 0
      - Begins when the asset is available for use
      - The UL and amortisation method must be reviewed at least at each financial year end and adjusted where necessary
    - - However, it should be tested for impairment at least annually
- - - - For most assets/liabilities, the unit of account is the individual asset or liability but in some instances may be a group of assets or liabilities
    - - Market-based measure, not an entity specific one
      - Valuation techniques used to measure FV
        
        FV Hierarchy
        
        Level 1
        
        Quoted prices (unadjusted) in active markets for identical assets/ liabilities that the entity can access at the measurement date
        
        Level 2
        
        Inputs other than quoted prices included within level 1 that are observable either directly or indirectly
        
        Level 3
        
        Unobservable inputs. It is only used where relevant observable inputs are not available or where the entity determines that transaction price or quoted price does not represent FV
        
        Maximise the use of observable inputs and minimise the use of unobservable inputs
        
        Increase consistency and compatibility
      - FV should be measured using the assumption that market participants would use when pricing the asset or liabilities, assuming that market participants act in their best economic interest
    - - A market in which the transactions for the assets/liabilities take place with sufficient frequency and volume to provide pricing info on an ongoing basis
      - FV measurement assumes that the transaction take place either
        
        In principal market
        
        Less transport cost only
        
        The one with greatest volume and level of activity
        
        In most advantageous market (in the absence of principal market)
        
        Less transport and transaction costs
        
        market that would maximise the amount that would be received to sell an asset or minimise the amount that would be paid to transferred a liability after taking into account the transport or transaction costs