 |
|
For business information, annual reports, laws, ordinances, regulations and articles. |
|
|
030123
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD
Circular No. 2
Reference No. SECP/ICAP/SCD/05/2001
January 23 , 2003
INTERNATIONAL ACCOUNTING STANDARD 40 “INVESTMENT PROPERTY”
Whereas vide SRO 57(I)/2002 dated January 23,
2002, IAS 40 “Investment Property” was
adopted and notified by Securities and Exchange Commission of Pakistan.
Therefore in pursuance of the provisions of SRO 57(I)/2002 and Sub-Section (3)
of Section 234 of the Companies Ordinance, 1984 as amended by the Companies
(Amendment) Ordinance, 2002, the accounting treatment laid down in IAS 40 is
required to be followed by all companies in respect of investment properties.
Accordingly, an investment property, subsequent to its initial recognition, is
either to be measured under the Fair Value Model or Cost Model specified in IAS
40.
2. At the time
of first application of IAS 40, it would be necessary to reclassify any amount
that was held in revaluation surplus in respect of such investment property. It
is pertinent to consider that the provisions of Fourth Schedule to the Companies
Ordinance, 1984 make a clear distinction between fixed assets and investments
(including investments in immovable properties). Accordingly, it is hereby
clarified that a reclassification of the amount held in revaluation surplus in
respect of investment properties, at the time of the first application of IAS
40, would not fall within the ambit of section 235 “Treatment of surplus arising
out of revaluation of fixed assets” of the Companies Ordinance, 1984.
(Jaweria Ather)
Director (Accounting)
