Accounting for ‘Mixed use investment properties’ under FRS 102

home-1596607_640 Where a company owns a property and it is using it for mixed use, i.e. a portion for the running of its own business and a portion being rented out as an investment property the following accounting rules apply: The property shall be separated between investment property and property, plant and equipment. The investment property element should be initially measured at cost and thereafter measured at fair value and the changes reported in the profit and loss. The property, plant and equipment element should be initially measured at cost and thereafter at cost less accumulated depreciation. The company may revalue the property, plant and equipment element with any increase in value reported in other comprehensive income. If it is not possible to separate which element of the property relates to investment property and which element relates to property plant and equipment without any undue cost or effort, the entire property shall be accounted for as property, plant and equipment.

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