Tamarind Properties measures investment property using the fair value model (IAS 40) and owner-occupied property using the cost model (IAS 16).

Date	Event
January 1, 2026	Bought an office building to rent out to tenants: purchase price $2,000,000, legal fees $40,000 and property transfer tax $60,000, all paid in cash.
July 1, 2026	Tamarind moved out of its own head office building and leased it to a third party. The building cost $800,000; accumulated depreciation at January 1, 2026 was $180,000 and annual depreciation is $40,000. Its fair value on July 1 was $750,000.
During 2026	Rent received in cash: $150,000 from the office building and $30,000 from the former head office (record one summary entry on December 31).
December 31, 2026	Fair values: office building $2,240,000; former head office $770,000.

Required:

Initial Cost — the amount at which the office building is first recognised.
Gain in OCI — the amount recognised in other comprehensive income when the head office is transferred.
Journal Entries — the purchase; the July 1 depreciation and transfer; the rent; and the December 31 fair value adjustment (one entry). Use Investment Property, Cash, Depreciation Expense, Accumulated Depreciation - Buildings, Buildings, Revaluation Surplus, Rent Revenue and Gain on Fair Value of Investment Property.
Gain in Profit — the total fair value gain in profit or loss for 2026.
Statement Impact — the effect of the July 1 transfer entry (not the depreciation).

Investment Property

1 Investment Property practice challenge