Applying IFRS for the real estate industry
PwC 3
1.3. Relevant accounting standards
Acquisition and construction of real estate that is accounted for as investment property is governed by the
requirements of IAS 40, ‘Investment property’, IAS 16, ‘Property, plant and equipment’, and IAS 23,
‘Borrowing costs’.
The requirements of IAS 17, ‘Leases’, apply when an entity leases out the real estate property or an entity does
not elect to classify its property interest under an operating lease as investment property. The requirements of
IAS 18, ‘Revenue’, apply for revenue generated by a real estate entity other than lease income.
This publication is based on accounting standards that are effective for periods beginning on or after
1 January 2017.
There are a number of new standards, interpretations or amendments to existing standards issued as of the
date of this publication that are not yet effective. Their impact is presented in separate sections under each
relevant area or otherwise referred to specifically in the guide. The standards, interpretations or amendments
are as follows:
IFRS 9, ‘Financial Instruments’, which replaces guidance of IAS 39 on classification and measurement of
financial instruments (‘IFRS 9’);
IFRS 15, ‘Revenue from contracts with customers’, which replaces the guidance in IAS 18, IAS 11, IFRIC 13,
IFRIC 15, IFRIC 18 and SIC 31 (‘IFRS 15’);
IFRS 16, ‘Leases’, which replaces IAS 17, IFRIC 4, SIC 15 and SIC 27 (‘IFRS 16’);
‘Transfers of investment property’ amendments to IAS 40, ‘Investment Property’;
IFRIC 22, ‘Foreign currency transactions and advance consideration’ (‘IFRIC 22’); and
IFRIC 23, ‘Uncertainty over income tax treatments’ (‘IFRIC 23’).
The following standards, effective as at the date of this publication, are referred to in the guide:
IFRS 3, ‘Business combinations’ (‘IFRS 3’);
IFRS 5, ‘Non-current assets held for sale and discontinued operations’ (‘IFRS 5’);
IFRS 7, ‘Financial instruments: disclosures’ (‘IFRS 7’);
IFRS 8, ‘Operating segments’ (‘IFRS 8’);
IFRS 10, ‘Consolidated financial statements’ (‘IFRS 10’);
IFRS 11, ‘Joint arrangements’ (‘IFRS 11’);
IFRS 13, ‘Fair value measurement’ (‘IFRS 13’);
IAS 1, ‘Presentation of financial statements’ (‘IAS 1’);
IAS 2, ‘Inventories’ (‘IAS 2’);
IAS 7, ‘Statement of cash flows’ (‘IAS 7’);
IAS 8, ‘Accounting policies, changes in accounting estimates and errors’ (‘IAS 8’);
IAS 11, ‘Construction contracts’ (‘IAS 11’);
IAS 12, ‘Income taxes’ (‘IAS 12’);
IAS 16, ‘Property, plant and equipment’ (‘IAS 16’);
IAS 17, ‘Leases’ (‘IAS 17’);
IAS 18, ‘Revenue’ (‘IAS 18’);
IAS 21, ‘The effects of changes in foreign exchange rates’ (‘IAS 21’);
IAS 23, ‘Borrowing costs’ (‘IAS 23’);