Five years ago, ABC Inc. acquired two properties (1) land and (2) office buildings. The company earns rental income from these properties. The company acquired another property (i.e., vacant land) during the year for $520000. The company has yet to determine the use of the newly acquired land, and the transaction cost incidental to acquiring this vacant land is $15000. The company accounts for investment property using the fair value model, while owner-occupied property is accoutered for under the cost model.

On the date of acquisition of this vacant land, there is clear evidence that the fair value of this property cannot be reliably determinable on a continuing basis since comparable market transactions are infrequent and alternative reliable estimates of fair value are not available. None of these properties have been disposed of during the current year. The financial director is unsure of how this vacant land should be classified and measured and has asked you, the financial accountant, to investigate this and report back to him.

Required: Prepare an email response to this inquiry by the financial director about the classification and measurement of the vacant land with reference to IAS 40, Investment Property and IAS 16, Property, Plant and Equipment, where appropriate.