What is the difference between Investment property & PPE?

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What is the difference between Investment property & PPE?

Investment Property (IP)

Land or building (or a part of it), or both, held for the following specific purposes:

To earn rentals;
For capital appreciation; or
Both

Accounting for IP

IP shall be measured at fair value at each reporting date.

The IP shall use the cost model if the fair value cannot be measured reliably without undue cost or effort

Undue costs or effort means the costs and benefits from obtaining or determining the information necessary to comply with a requirement

Property, plant and equipment (PPE)

For use in production or supply of goods or services
For administrative purposes
It is expected to be used during more than one period.

Accounting for PPE

1.Cost model

Cost less depreciation less accumulated & impairment losses

2.Revaluation model

Revalued amount less accumulated depreciation & accumulated impairment losses.

Complication

What is the treatment of property that is partly investment and partly owner occupied?

Mixed use property shall be separated between IP and PPE.

However, the entire property shall be accounted for as PPE if the fair value of the IP component cannot be measured reliably without undue costs or effort.

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