Today, let's talk about investment real estate.
For investment real estate, there are two modes of measurement in accounting:
One is the cost model;
The logic is the same as that of ordinary fixed assets, depreciation is honestly accrued;
One is the fair value model;
This is a common practice, requiring companies to regularly assess the fair value of the investment properties they hold, and then measure the value of the investment properties at fair value.
Why do you have to do so many tricks in accounting?
Isn't it bad to use one mode?
Doesn't it smell good from the beginning?
Isn't this adding chaos to the world and blocking CPA students?
Don't ask, the purpose of asking is to reflect the value and profit of the company's book assets more objectively and fairly.
You can imagine if you buy a house for investment purposes, not for your own residence, not for enjoyment, just to sell high and buy low, just to enjoy the adrenaline rush brought by asset appreciation.
At the end of each year, do you pay attention to the current market price of this house, or pay attention to your ** price of the year?
It's the same with companies.
As a real estate held for investment purposes, the company's shareholders are concerned with the rent, which is the future appreciation, not the price, so if it is measured by historical cost, the decision-making relevance of the accounting information will be greatly reduced.
When accountants cannot provide useful information for decision-making, the voice of accountants will become weaker and weaker, and the status of accountants will become more and more marginalized.
Therefore, this is not to worry about the new word, not to deliberately toss the cpaer,It is a battle and battle for the right to speak.
As a result, the big players who set the standards made a big stroke of the pen and allowed enterprises to use fair value to measure investment real estate if conditions permit.
The accountant took back the right to speak, but the tax law didn't approve of it.
There is no such thing as investment real estate in the tax law, no matter what historical cost or fair value, the tax law requires that it be depreciated honestly and be a down-to-earth person according to ordinary fixed assets.
That is to say, under the caliber of the tax law, there is only one model, and that is the cost model.
Because once the fair value measurement is opened, believe it or not, in order to pay less taxes, the third-party appraisal agency hired by the company can make the house price return to 20 years ago in minutes.
The three major illusions in life, housing prices will fall, ** will rise, and they still love me.
Why do accounting and tax law have such different attitudes towards the same asset?
Because the butts are different, the thinking patterns and conclusions are completely different.
* The fair value measurement model may better reflect profits, but at the same time give more room for manipulation;
The one-size-fits-all cost model may not truly reflect the profit and loss of the enterprise, but it is simpler to operate in practice to ensure that the tax can be recovered with quality and quantity.
Children only distinguish between right and wrong, and adults only look at the pros and cons.
It's all a trade-off.
February** Dynamic Incentive Program