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List of GRIs

List of GRIs

32. Investment property

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32.1 Accounting policy

Investment property is held to earn rental income or obtain benefits from increases in value, or both. Investment property is not used in operating activities.

Investment property is initially recognized at purchase price or production cost, plus transaction costs. After initial recognition it is measured at fair value, in accordance with the rules described in section 9.1.6. Gains and losses resulting from the change of fair value of investment property are recognized in the consolidated profit and loss account under “Net movement in fair value of assets and liabilities measured at fair value” item in the period in which they occurred.

If owner-occupied property becomes investment property, depreciation is charged up to the date of reclassification and impairment losses, if any, are recognized and then:

  • if the carrying amount determined as at that date is higher than the fair value, the difference is recognized in the consolidated profit and loss account under “Other operating expenses”;
  • if the existing carrying amount is lower than the fair value then the difference is first recognized in the consolidated profit and loss account under “Other operating income” as a reversal of the impairment loss (up to the amount of the impairment loss previously recognized, whereby the amount recognized in the consolidated profit and loss account may not exceed the amount of the impairment loss that would have been determined after deducting the accumulated depreciation had no impairment loss been recognized), and the remaining part of the difference – in other comprehensive income under “Reclassification of real property from property, plant and equipment to investment property”.

On subsequent disposal of the investment property, revaluation reserve may be transferred to supplementary capital.

32.2 Estimates and assumptions

The impact of the COVID-19 pandemic on the real estate market, in particular on the commercial real estate segment, is included in the capitalization rates used for the valuation. The impact of the factors having a significant impact on the investment property valuations is presented in section

32.3 Quantitative data

Movement in investment property 1 January – 31 December 2021 1 January – 31 December 2020
Net carrying amount at the beginning of the period 2 493 1 981
Additions 592 538
– purchase 430 228
– increase in right-of-use assets - 14
– transfers from held for sale categories under IFRS 5 162 296
Reductions -470 -260
– sale and liquidation -1 -2
– transfers to held for sale categories under IFRS 5 -469 -257
– decrease of right-of-use assets - -1
Gain (loss) on remeasurement to fair value 158 234
– through profit or loss 158 233
– through other comprehensive income - 1
Net carrying amount at the end of the period, including 2 773 2 493
– buildings and structures 2 514 2 262
– own land 196 170
– perpetual usufruct right to land and cooperative ownership right to premises 63 61

The item “Perpetual usufruct of land” contains the right to use land for up to 99 years. This right may be traded.

The fair value of investment property results from valuations by independent appraisers conducted mainly in 2021.