The Adoption of International Accounting Standard No.(40) Investment Property by Companies Applying the Common Accounting System for Banks and Insurance Companies and Its Reflection on Its Financial Statements

The Adoption of International Accounting Standard No.(40) Investment Property by Companies Applying the Common Accounting System for Banks and Insurance Companies and Its Reflection on Its Financial Statements

Fayhaa Abdullah yaqoob *a       &     Ehab Abdul Wahab Hachim b

University of Baghdad , Higher Institute of Accounting and Financial Studies.

Abstract

Many financial institutions invest their surplus funds in investment property, either to obtain investment income represented by rents or wait until the capital value – the property – increases, and then sell it and obtain profits from the difference between the value recorded in its records and the selling price, and investment property (lands and buildings) is an important part of the financial position of financial institutions applying to the unified accounting system for banks and insurance companies, in addition to its apparent impact on the outcome of the activity of those institutions.The aim of the research is to define what are the investment properties in financial institutions, and to indicate the accounting treatments necessary to move towards the process of adopting International Accounting Standard No. (40) investment property and its reflection on its financial statements, and the researchers concluded that the adoption of the international standard contributes to a large extent in changing the financial position of institutions The financial, in addition to the result of its activity, the researchers recommended that the international standard for accounting for property investments should be adopted, especially that their book values ​​- for buildings – are close to zero, and that the value of their book lands does not reflect market indicators at the present time, in most of the institutions that adopt the cost model.

DOI:10.52113/6/2020-10-3/213-225

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