How to make entries when a self occupied office building is converted to lease investment real esta

Businesses convert unused office space into investment real estate.

There are two types of accounting treatment for rentals:

In the first case, the investment real estate is accounted for using a cost model:

Borrow: Investment real estate (original value).

Accumulated depreciation (depreciation withheld).

Provision for impairment of fixed assets.

Provision for impairment has been made).

Credit: Fixed Assets (Original Value).

Accumulated depreciation of investment real estate (depreciation withheld).

Provision for impairment of investment real estate (provision for impairment has been made).

In the second case, the investment real estate is accounted for using the fair value model, which is divided into two possibilities: the first possibility is when the carrying amount of the original office building is less than the fair value on the conversion date.

Borrow: Investment Real Estate - Accumulated Depreciation (Depreciation Provided) at the fair value of the cost of the exchange

Provision for impairment of fixed assets (provision for impairment).

Credit: Fixed Assets (Original Value).

Other comprehensive income (difference).

The second possibility is when the carrying amount of the original office building is greater than the fair value on the date of conversion.

Borrow: Investment Real Estate - Accumulated Depreciation (Depreciation Provided) at the fair value of the cost of the exchange

Provision for impairment of fixed assets (provision for impairment).

Fair value change gain or loss.

Difference) credit: fixed assets (original value).

Investment real estate refers to real estate that is held for the purpose of earning rent or capital appreciation, or both. Investment real estate should be able to be measured separately and **.

Investment real estate mainly includes: leased land use rights.

Land use rights and leased buildings that are held and ready to be transferred after appreciation.

The following items are not considered investment real estate:

1) Real estate for self-use, that is, real estate held for the production of goods, provision of labor services, or operation and management;

2) Real estate as inventory. Investment real estate is a normal and regular activity, and the rental income or transfer appreciation income generated is recognized as the main business income of the enterprise.

However, for most enterprises, it is other business activities related to business activities.

Own house for rent.

1.First, it is converted to investment real estate accounting, which is generally accounted for by the cost method.

Borrow: Investment real estate - original price.

Accumulated depreciation. Credit: Fixed Assets - Original Price.

Accumulated depreciation of investment real estate.

2.Rent received:

Borrow: Bank deposit.

Credit: Other business income.

Tax Payable – VAT payable.

An entry refers to a procedure in accounting. It is the first step in the usual accounting process in the work process. When a transaction occurs, the accounting voucher (referring to the summons) is prepared according to the original voucher (referring to the receipt and invoice) obtained from the transaction, and then the use of each accounting account and its amount are decided according to the accounting voucher.

Filling in the journal one by one in the order in which the transactions occurred is called "entry". The account books used to record entries are called journals, also known as sequential books, entry books, and original record books.

There are two types of accounting treatment for enterprises to convert idle office space into investment real estate for rent:

In the first case, the investment real estate is accounted for using a cost model:

Borrow: Investment real estate (original value).

Accumulated depreciation (depreciation withheld).

Provision for impairment of fixed assets (provision for impairment).

Credit: Fixed Assets (Original Value).

Accumulated depreciation of investment real estate (depreciation withheld).

Provision for impairment of investment real estate (provision for impairment has been made).

In the second case, the investment real estate is accounted for using the fair value model, which is divided into two possibilities:

The first possibility is that when the carrying amount of the original office building is less than the fair value on the conversion date, the accumulated depreciation (depreciation has been provided) will be borrowed: investment real estate - cost of one by one * fair value on the date of exchange).

Provision for impairment of fixed assets (provision for impairment).

Credit: Fixed Assets (Original Value).

Other comprehensive income (difference).

The second possibility is that when the carrying value of the original office building is greater than the fair value on the date of conversion, the accumulated depreciation (depreciation has been provided) of the investment real estate - the cost of the investment property - the fair value of the date of exchange

Provision for impairment of fixed assets (provision for impairment).

Fair value change gain or loss (difference).

Credit: Fixed Assets (Original Value).

Not a few exercises, but all of them.

As long as it is an investment property accounted for by the cost method, it is.

Borrow: Investment Real Estate 500 Accumulated Depreciation 30 Credit: Fixed Assets 500

Accumulated depreciation of investment real estate 30 As for why, it is because you have not carefully read the accounting requirements of the standard for investment real estate, and you do not understand the concept of depreciation at all, so you have such an outrageous answer.

Have you ever seen a debit balance for accumulated depreciation?

It can only be carried forward according to the original value, not according to the net value, otherwise the difference is placed in **?

In response to the problem of converting idle office space into accounting entries for investment real estate rental, we have uploaded a basic entry of accounting treatment for you, which has the relevant content you want, but the number of attachments is limited, which may not fully meet your needs, if necessary, you can send you a more detailed and comprehensive set of information, you read it, see the end, it should be helpful to you, I hope I can help you! Thank you!