METHODS OF VALUATION OF INVESTMENTS IN THE LONG-TERM MATERIAL ASSETS - ITS IMPACT ON THE FINANCIAL AND TAXING POSITION OF AN ENTERPRISE ACCORDING TO MRS 40

International Accounting Standard (IAS) 40 has been applied since January 1, 2005. It refers to recognition, measurement and presentation of a particular part of the long term material asset which is held for purpose of lease or capital increase. IAS 40 defi nes this asset as an investment property that could be accounted for using the fair value model or the cost model. Fair value measurement for the investment property implies existence of an active property market, which makes the appliance of this standard more diffi cult. Alternatively, it is possible to estimate the fair value using discounted cash fl ows from lease but the result is directly infl uenced by the choice of the discounted rate and other parameters of the calculation. The article comprises certain practical examples that show how use of different models makes changes in a fi nancial result in a Profi t & Loss Account. The authors of this article suggest the appliance of this standard mostly to the large business entities with listed shares.