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Ministry of Justice of Ukraine

July 16, 2007

No. 823/14090

ORDER OF THE MINISTRY OF FINANCE OF UKRAINE

of July 2, 2007 No. 779

About approval of the National provision (standard) of financial accounting 32 "Investment real estate"

(as amended on 09-07-2021)

According to article 6 of the Law of Ukraine "About financial accounting and the financial reporting in Ukraine" PRIKAZYVAYU:

1. Approve the National provision (standard) of financial accounting 32 "Investment real estate" approved by Methodological council on financial accounting under the Ministry of Finance of Ukraine which is applied.

2. To management of methodology of financial accounting (Lovinskaya L. G.) provide provision of this order in five-day time in accordance with the established procedure on state registration in the Ministry of Justice of Ukraine.

3. (Kutetskaya V. M.) after state registration of this order to provide to department of organizational and analytical ensuring activities of the Minister (foster service) its publication in mass media.

4. Determine that the National provision (standard) of financial accounting 32 "Investment real estate" becomes effective since January 1, 2008.

5. To impose control over the implementation of this order on the deputy minister Efimenko T. I.

 

First vice-Prime Minister of Ukraine, Minister of Finance of Ukraine

N. Ya. Azarov

Approved by the Order of the Ministry of Finance of Ukraine of July 2, 2007 No. 779

National provision (standard) of financial accounting 32 "Investment real estate"

 

General provisions

1. This National provision (standard) determines methodological bases of forming in financial accounting of information on the investment real estate and its disclosure in the financial reporting.

2. Regulations of this National provision (standard) are applied by the companies, the organizations and other legal entities (further - the companies) irrespective of patterns of ownership (except budgetary institutions and the companies which according to the legislation constitute the financial reporting under International Financial Reporting Standards).

3. this National provision (standard) is not applied to the questions settled by the National provision (standard) of the financial accounting 14 "Lease" approved by the order of the Ministry of Finance of Ukraine of 28.07.2000 No. 181 and registered in the Ministry of Justice of Ukraine 10.08.2000 for No. 487/4708 (further - the National provision (standard) of the financial accounting 14 "Lease"), and other provisions (standards) of financial accounting, namely to:

1) classifications of lease on operational and financial;

2) to recognition of lease revenue of objects of the investment real estate;

3) to assessment by the lessor of the real estate which is provided in lease under the agreement of finance lease;

4) to sales accounting and transactions on asset sale with their further lease;

5) to disclosure of information on finance and operating lease in the financial reporting;

6) to accounting of the biological assets connected with agricultural activities;

7) to accounting of the rights to exploring and mining and non-reproducible resources.

4. Terms which are used in provisions (standards) of financial accounting have such value:

The investment real estate - own or leased on the terms of finance lease parcels of land, buildings, constructions which are located on the earth, containing for the purpose of receipt of lease payments and/or increase in equity, but not for production and delivery of goods, provision of services, the administrative purpose or sale in the course of regular activities.

The operational real estate - own or leased on the terms of finance lease parcels of land, buildings, constructions which are located on the earth, containing for the purpose of use for production, or delivery of goods or provision of services, or in the administrative purposes.

Asset carrying amount - asset cost on which it joins in balance sheet total.

5. For the purpose of financial accounting it is not considered the investment real estate:

5.1. The operational real estate, and also the real estate which contains for future reference as the operational real estate.

5.2. The real estate which contains with sales objective under conditions of regular economic activity.

5.3. The real estate which is under construction or improves at the request of the third parties.

5.4. The real estate which stays in the course of construction or improvement for the purpose of future reference as the investment real estate.

5.5. The real estate which is provided in lease to other subject of managing on the terms of finance lease.

6. If certain fixed asset object includes part which contains for the purpose of receipt of the rent and/or for increase in equity, and other part which is the operational real estate, and these parts can be sold separately (or are separately provided in lease according to the agreement on finance lease), then these parts are displayed as separate inventory objects. If these parts cannot be sold separately, the fixed asset object is recognized the investment real estate on condition of its use mainly for the purpose of receipt of the rent and/or for increase in equity.

In the presence of signs in case of which the fixed asset object can be carried also to the operational real estate, and to the investment real estate the company develops criteria concerning their differentiation.

7. If the company controls the investment real estate provided in lease to parent entity or affiliated enterprise for production or delivery of goods or provision of services or with the administrative purpose, such fixed asset object in case of creation of consolidated financial statements of this group of companies is considered the operational real estate.

 

Recognition and assessment of the investment real estate

8. The investment real estate is recognized asset if there is probability that the company will receive in the future from its use economic benefits in the form of lease payments and/or increases in equity, and its primary cost can be authentically determined.

9. The acquired (created) investment real estate are enlisted on balance of the company for primary cost. Accounting unit of the investment real estate is the parcel of land, the building (part of the building) or their combination, and also assets which form single (complete) complex with the investment real estate and in total generate cash flows.

10. Primary cost of the acquired investment real estate consists of such expenses:

the amounts which pay to suppliers (sellers) and contractors for accomplishment of installation and construction works (without indirect taxes);

the registration fees, the state fee and similar payments which are made in connection with acquisition of rights (obtaining) of the rights to the investment real estate;

the amounts of indirect taxes in connection with acquisition (creation) of the investment real estate (if they are not compensated to the company);

the legal services, commission fees connected with acquisition of the investment real estate;

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