ACQUISITION OF REAL ESTATE AS INVESTMENT PROPERTY ACCORDING TO NATIONAL AND INTERNATIONAL ACCOUNTING STANDARDS – CASE OF CROATIA

Abstract

The accounting treatment of real estate varies depending on the intended purpose of the acquired property. This paper discusses the theoretical and practical aspects of the accounting standards for treatment of the item investment property according to the International Financial Reporting Standards (IFRS), the Croatian Financial Reporting Standards (CFRS) and the International Financial Reporting Standards for Small and Medium Sized Enterprises (IFRS for SMEs). The theoretical part of the paper analyzes different models for measuring and accounting for investments in real estate according to different accounting standards. Particular attention is paid to the notes to the financial statements. The empirical part of the paper is an extension of the research conducted in 2013 on a sample of quoted companies in Croatia. The analysis of the financial statements of quoted companies shows that they did not disclose all relevant information on investments in real estate in the notes to the financial statements. To determine whether there were any improvements in financial reporting on investments in real estate, we have compared the results for 2017 with the results for 2013.