United States

Proposed amendment to IAS 40


Paragraph 57 of International Accounting Standard (IAS) 40, Investment Property, provides guidance on transfers to, or from, investment properties. However, it does not specifically address whether a property under construction or development that was previously classified as inventory could be transferred to investment property when there is an evident change in use. To clarify this guidance, the International Accounting Standards Board recently issued an Exposure Draft, Transfers of Investment Property (Proposed amendment to IAS 40), which proposes to amend paragraph 57 of IAS 40 to:

  • State that an entity shall transfer a property to, or from, investment property when, and only when, there is a change in use of a property supported by evidence that a change in use has occurred
  • Re-characterize the list of circumstances set out in paragraph 57(a)–(d) as a non-exhaustive list of examples of evidence that a change in use has occurred instead of an exhaustive list

The proposal is open for public comment until March 18, 2016.