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Investment Properties

Investment Properties
FRS 102 requires investment properties to be valued at fair value with any increase or decrease in fair value shown in the profit or loss account. This policy applied also to properties rented out to other group companies. This forced small groups to incur costs of obtaining a fair value with very little benefit. 
Now the Financial Reporting Council has introduced an accounting policy choice allowing an entity to follow the fair value approach detailed above or stating investment properties at cost less depreciation and impairment. 
 
Where a company adopts the cost option, it can use the fair value at date of transition (ie start of the comparative period) as deemed cost. In this way, we can avoid reversing all fair value adjustments previously recognised. 
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