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CA Final · Financial Reporting · Ind AS 40 Investment Property

Rohan Ltd leases a warehouse to another entity under a finance lease and also holds a second warehouse it will use for its own future operations. How are these treated under Ind AS 40?

Neither warehouse is investment property. Ind AS 40 excludes property leased to another entity under a finance lease, and also excludes property held for future use as owner-occupied property, which falls under Ind AS 16 or Ind AS 116.

  1. ABoth are investment property
  2. BOnly the finance-leased warehouse is investment property
  3. COnly the warehouse held for future own use is investment property
  4. DNeither is investment propertyCorrect

Explanation

Paragraph 9(e) excludes property leased to another entity under a finance lease, and 9(c) excludes property held for future use as owner-occupied property. Hence neither qualifies. Treating the finance-leased one as investment property ignores the exclusion.

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