Question

Question 17. Which of the following statements regarding own-occupied property and IAS 16 are correct?
1. The cost of an item of PPE may include the estimated costs of dismantling it in the future.
2. All increases and decreases in the carrying amount of a property measured using the revaluation model are recognised in OCI.
3. All items of property, plant and equipment must be depreciated.
4. A change in residual value is applied retrospectively.

1 and 2

1 and 4

2 and 4

2 and 3

Answer 1

Ans 17. 1 and 2

Owner-occupied property (IAS 16 Property, Plant, and Equipment(PPE), including property held for future use as owner-occupied property, property held for future development, and subsequent use as owner-occupied property, property occupied by employees and owner-occupied property awaiting disposal do not come under investment property.

In May 2008, as part of its Annual improvements project, the IASB expanded the scope of IAS 40 to include property under construction or development for future use as an investment property. Such property previously fell within the scope of IAS 16.

Other comprehensive income (OCI) includes revenues, expenses, gains, and losses that have yet to be realized.