Global Standards for the world economy

Wednesday 23 October 2019

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IASB decides not to pursue this issue further at the current time

 16 December 2014


On 16 December, the IASB considered an issue that had previously been discussed by the Interpretations Committee. The issue was whether an entity should apply IAS 40 Investment Property to account for a structure, such as a telecommunication tower, that lacks the physical characteristics of a building, if the entity lets spaces in the structure to tenants to earn rentals.

The Interpretations Committee had questioned whether such a structure qualifies as a ‘building’ because it lacks the features usually associated with a building, such as walls, floors and a roof, but had expressed support for considering whether the scope of IAS 40 should be broadened to include such structures. However, the Interpretations Committee was concerned that the question could also be raised in respect of other structures, such as gas storage tanks and advertising billboards and referred the issue to the IASB.

In July 2014 the IASB directed the staff to undertake preliminary research to help the IASB to decide how to proceed. At this meeting, the IASB considered a summary of the outreach and analysis performed by the staff, and to decide what future action should be taken. The IASB decided not to pursue this issue further at the current time because there appeared to be limited demand for fair value accounting for these types of structures, and limited diversity in practice.

Eight of the fourteen IASB members agreed with this decision.

Next steps

No further work is planned on this issue.

 

 

 

 

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