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Note 2 - Non-current assets When I look at the statement of financial position, one of the categories of non-current assets is 'investment properties' and

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Note 2 - Non-current assets When I look at the statement of financial position, one of the categories of non-current assets is 'investment properties' and another category is property, plant and equipment in which all other properties are included. Surely, we invest in all our properties, so why do we have two categories for them in the statement of financial position? How do we decide what goes into property, plant and equipment and investment properties"? In addition, a note to the financial statements states that investment properties are measured at their fair values and not depreciated. Don't all non-current assets have to be depreciated over their estimated useful lives? Another note states that property included in property, plant and equipment' is measured at cost less accumulated depreciation rather than at fair value. Shouldn't all properties be measured in the financial statements on a consistent basis? Don't you think this is a clear violation of consistency concept? Finally, I can't immediately see from the financial statements where the gains or losses relating to the measurement of investment properties are included. The profit statement seems to include two main components - profit or loss and other comprehensive income. Where would the gains or losses go? Presumably, is the treatment of gains and losses the same for any non-current assets which are measured at fair value? Required: Given the above facts, discuss clearly what constitute *property, plant and equipment and investment property'. You are also required to explain the correct accounting treatment of revaluation gain and loss, and fair value gain and loss. (8 marks)

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