The treatment of investment real estate for self-use can be seen in this article Flip Book Ma Dongmei, Heshu Ma What Mei?
Today, I will mainly talk about the situation of self-occupied real estate converted into investment real estate.
Remember one big principle:
If the self-occupied real estate is converted into investment real estate, the self-occupied real estate shall be measured according to the cost model until the date of conversion
If the converted investment property is measured using the cost model, the initial amount recorded is the carrying amount of the real estate for self-use on the date of conversion;
If the converted investment property is measured using the fair value model, the initial recorded amount is the fair value of the real estate on the date of conversion.
As you can see, there is a difference from the principle of converting investment real estate to self-use real estate mentioned earlier.
It was said before:
The conversion of investment real estate to self-use real estate, whether it is measured in the cost mode or in the fair value model, is to measure the original measurement mode to the date of conversion, and then use the book value on the date of conversion as the initial recognition amount of fixed assets and intangible assets.
The core is to measure to the day of the conversion date with the original measurement mode, and then convert the same amount.
When self-used real estate is converted into investment real estate, although the original measurement model (cost model) is also measured to the date of conversion, it is not necessarily the same amount of conversion
When investment real estate is measured in a cost model, the same amount is converted;
When the investment real estate is measured by the fair value model, it cannot be converted in equal amounts, and the fair value should be used as the initial recorded value of the investment real estate.
Why is there such a difference?
StillQuality of accounting informationproblems.
Compared with historical cost, fair value can provide more relevant and reliable accounting information, as the so-called people go to a higher place, the quality of accounting information is also to a higher place, and it will not turn back the clock of history.
The measurement model of investment real estate can be selected, either at cost or at fair value.
There is no choice for the measurement mode of fixed assets, only the cost model.
It can be seen that investment real estate has the advantage of accounting information quality compared with fixed assets, and the conversion from investment real estate to fixed assets is a dimensionality reduction blow in the measurement mode.
Therefore, the conversion from investment real estate to self-use real estate is a high-dimensional conversion to a low-dimensional conversion, and it is a dimensionality reduction blow.
If the investment real estate is measured on a cost model, the quality of the accounting information remains unchanged in the same amount as in the past
If the investment property is measured using the fair value model, the quality of the accounting information is higher than the historical cost when the equivalent amount is converted to the past.
The conversion from self-use real estate to investment real estate is a low-dimensional conversion to a high-dimensional conversion, and an ascending dimension, so the equivalent conversion is no longer fully applicable.
If the conversion of investment real estate in the past is still measured by the cost model, it can be converted in equal amounts, because the quality of the accounting information provided before and after remains the same;
If the converted investment real estate is to be measured by a higher-dimensional fair value model, it cannot be converted in equal amounts, and must be switched to fair value.
Thinking about it this way, isn't it easy to remember how to deal with the various conversions of investment real estate and owner-occupied real estate?