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"

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.

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 July 28, 2000 No. 181, registered in the Ministry of Justice of Ukraine on August 10, 2000 at No. 487/4708 (in edition of the order of the Ministry of Finance of Ukraine of December 28, 2022 No. 468) (further - the National provision (standard) 14), 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. The terms used in national provisions (standards) of financial accounting have the following value:

The investment real estate is the real estate (the parcel of land, the building, the building (part of the building) or their combination) withheld by the owner or the lessee according to the agreement of finance lease for the purpose of receipt of lease payments and/or increase in equity, but not for use in production and delivery of goods in case of provision of services and for the administrative purposes or sale in the course of regular activities.

The operational real estate Real estate (the parcel of land, the building, construction (part of the building) or their combination) withheld by the owner or the lessee according to the agreement of finance lease for the purpose of use in production and delivery of goods in case of provision of services and for the administrative purposes.

Book value of asset - asset cost on which it joins in final balance.

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 containing for future reference as the operational real estate.

5.2. The real estate containing with sales objective in the conditions of regular economic activity.

5.3. The real estate which is in process of construction or improvement with sales objective in the conditions of regular economic activity.

5.4. The real estate withheld for the purpose of future improvement and further use as the operational real estate.

5.5. The operational real estate concerning which disposal is expected.

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

The investment real estate includes, for example:

the parcel of land withheld for long-term increase in equity, but not for short-term sale in the course of regular activities;

the parcel of land withheld for future reference which purpose of use is not determined yet. If by the company it is not determined yet whether the parcel of land will be used as the operational real estate, or for sale in the short term in the course of regular activities, then such parcel of land is considered withheld for increase in equity;

the building which is property of the company (or as right to use by the building withheld by the company) and provided in lease on one or several operating leases;

the building which is not occupied, but is serviced for lease according to one or several operational lease agreements.

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.

If fair value of part of object which belongs to the investment real estate authentically cannot be determined, then all real estate to which this part belongs is considered as fixed assets according to the National provision (standard) of the financial accounting 7 "Fixed assets" approved by the order of the Ministry of Finance of Ukraine of April 27, 2000 No. 92, registered in the Ministry of Justice of Ukraine on May 18, 2000 at No. 288/4509 (further - the National provision (standard) 7).

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.

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