FRS 102 defines investment property as property (which can include land or only part of a building) held by the owner or by the lessee under a finance or an operating lease to earn rentals or for capital appreciation or both.
SSAP 19 required investments properties to be carried at open market value with no depreciation, whilst FRS 102 refers to fair value (with no depreciation); although this change in wording will not lead to many differences in practice.
Under FRS 102 where there is a mixed use property, the fair value of the proportion of the area let should be quantified and accounted for as an investment property. So this will be one property with an element of it being depreciated and held at cost (being property, plant and equipment) and another element being held at fair value and not depreciated (being investment property).
Gains or losses on investment properties will be recognised through the profit and loss account in future, rather than through the Statement of Recognised Gains and Losses. It will be necessary to keep track of these amounts as they will not be distributable reserves.
