b operating losses incurred before the investment property achieves the planned

B operating losses incurred before the investment

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(b)     operating losses incurred before the investment property achieves the planned level of  occupancy, or (c)     abnormal amounts of wasted material, labour or other resources incurred in constructing or  developing the property. 24     If payment for an investment property is deferred, its cost is the cash price equivalent. The  difference between this amount and the total payments is recognised as interest expense over the  period of credit. 25       The initial cost of a property interest held under a lease and classified as an investment  property shall be as prescribed for a finance lease by  paragraph 20  of IAS 17, ie the asset  shall be recognised at the lower of the fair value of the property and the present value of  the minimum lease payments. An equivalent amount shall be recognised as a liability in  accordance with that same paragraph. 26     Any premium paid for a lease is treated as part of the minimum lease payments for this purpose,  and is therefore included in the cost of the asset, but is excluded from the liability. If a property  interest held under a lease is classified as investment property, the item accounted for at fair value  is that interest and not the underlying property. Guidance on determining the fair value of a  property interest is set out for the fair value model in  paragraphs 33 52 . That guidance is also  relevant to the determination of fair value when that value is used as cost for initial recognition  purposes. 27     One or more investment properties may be acquired in exchange for a non-monetary asset or  assets, or a combination of monetary and non-monetary assets. The following discussion refers to  an exchange of one non-monetary asset for another, but it also applies to all exchanges described  in the preceding sentence. The cost of such an investment property is measured at fair value  unless (a) the exchange transaction lacks commercial substance or (b) the fair value of neither the  asset received nor the asset given up is reliably measurable. The acquired asset is measured in  this way even if an entity cannot immediately derecognise the asset given up. If the acquired asset  is not measured at fair value, its cost is measured at the carrying amount of the asset given up. 28     An entity determines whether an exchange transaction has commercial substance by considering  the extent to which its future cash flows are expected to change as a result of the transaction. An  exchange transaction has commercial substance if:
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  • Spring '13
  • ArmeeJayCresmundo
  • investment property

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