Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in profit or loss.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.
All investment properties are carried at fair value determined annually and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided for. Changes in fair value are recognised in the profit and loss account.
An informal valuation, based on an current property values in the local area, was undertaken in March 2025. Following discussions with local estate agents and research on prime location, it was determined that house prices had increased and a fair value would be between £375-£390k. We have therefore an adjustment to the revaluation reserve to reflect the increase in value to £380k.