Impact of Application of IAS 40 in the Financial Statements of Mexico

Abstract

Faithful representation of financial statements is one of the most important characteristics of financial information. This is why an enterprise must adopt a normativity which adequately this condition. In the ligth of this context, the measurement method to be selected in order to determine the value of financial states is utmost crucial. Thus the present study aims at analyzing the financial impact of using the reasonable value model, established by IAS 40, as a means to value investment properties within a mexican enterprise which applies the financial information national standard which do not allow the use of the aformentioned reasonable value. The analysis of this study focuses on i) issuance of financial statements according to national and international standards ; ii) the impact on the non current assets and earnings and iii) the mandatory impact. Finally, an anlysis of the positive implications of the use of a razonable value within the enterprise being reasearched.