Part 1- Investment Properties

Under current Irish GAAP, Investment Properties are valued at Open Market Value on the balance sheet. Any movements in open market value are carried to the statement of recognised gains & losses, and in certain instances, the profit & loss account (subject to the requirements of SSAP 19). Under FRS 102, the investment property will be measured at fair value each year end and any movement will be recorded in the profit & loss account. Any profits recognised on fair value movement will not be an allowable profit for distribution. This may make it difficult to determine what profits can be paid to shareholders by a dividend and what can’t. Deferred tax must be recognised on movements in fair value. Properties rented to other group companies must also be valued at fair value under FRS 102 (under Irish GAAP, these were excluded from classification as an investment property). FRS 102 will mean that the fair value of Investment Properties will have to be estimated each year (provided it can be done without undue cost & effort)

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