You have a property on the books. But is it working in the business, or is it earning money on its own? The answer determines whether it is classified as Property, Plant and Equipment (PPE) or Investment Property under IFRS for SMEs. While the buildings may look the same, the accounting treatment is very different. This article breaks it down in simple terms so you can classify property correctly and avoid costly mistakes.

Investment property under IFRS for SMEs refers to land or buildings held for rental income or capital appreciation. The standard outlines how to recognise, measure, and disclose investment property in financial statements. Properties can be measured at fair value if reliably measurable or at cost if not. Mixed-use properties require classification based on usage. Leased properties can be treated as investment property under specific conditions. Proper accounting ensures transparency and accurate financial reporting for SMEs.