1️⃣ Revenue Recognition (IFRS 15 / IFRS 16)
• Sale of units: Revenue recognised on handover (transfer of control).
• For certain off-plan projects, revenue can be recognised over-time if customer controls the asset as it’s built.
• Lease income: Straight-line over lease term under IFRS 16.
2️⃣ Development Properties – Inventory (IAS 2)
• Land + construction meant for sale = inventory.
• Valued at lower of cost or NRV (net selling value).
• Cost includes land value, construction cost, project overheads, design fees, and capitalised borrowing cost.
3️⃣ Investment Property (IAS 40)
• Properties held for rental income or value appreciation.
• Company chooses between:
– Fair value model: Gains/losses directly in P&L.
– Cost model: Depreciated like PPE.
• Transfers allowed if purpose of property changes (e.g., leasing → selling).
4️⃣ Borrowing Costs (IAS 23)
• Interest on loans for long-term projects must be capitalised.
• Begin capitalisation when development starts; stop when asset is ready for use/sale.
5️⃣ Property, Plant & Equipment (IAS 16)
• Showrooms, offices, staff accommodations, site equipment.
• Depreciated over useful life.
• Major improvements are capitalised; repairs are expensed.
6️⃣ Impairment Testing (IAS 36)
• Required for inventory (if NRV falls), investment property (cost model), and PPE.
• Indicators: slow sales, cost overruns, market decline, project delays.
7️⃣ Provisions & Contingencies (IAS 37)
• Onerous contracts (cost > benefits).
• Warranties for post-handover defects.
• Legal disputes and land-related cases.
8️⃣ Financial Instruments (IFRS 9)
• Trade receivables, retention money, long-term advances.
• ECL (Expected Credit Loss) model must be applied even if receivables look secure.
9️⃣ Consolidation & Joint Ventures (IFRS 10 / IFRS 11)
• Many real estate developers use SPVs.
• Must assess:
– Control → full consolidation
– Joint control → joint venture or joint operation
🔟 Segment Reporting (IFRS 8)
• Real estate companies report by product lines such as:
– Residential units
– Commercial leasing
– Retail spaces
– Hospitality
• Helps stakeholders see which segment performs best.
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