VVO Group plc
Trading properties include properties meant for sale which do not meet the objectives of the company due to their location, type or size. VVO Group transfers a property from Investment property to Trading properties when there is a change in use. This is evidenced by commencement of development with a view to sale. If an investment property is being developed with a view to a sale, it will be accounted as trading property.
Trading properties are measured at the acquisition cost or the lower net realization value. Net realization value is the estimated selling price in the ordinary course of business deducted by the estimated costs necessary to make the sale. If net realization value exceeds the carrying amount, an impairment loss is recognized.
When a trading property becomes an investment property measured at fair value, the difference between the fair value on the transfer date and its previous carrying amount is recognized in income statement under Profit/loss on sales of trading properties.
Trading properties of the Group includes mainly single apartments ready for sale, business premises and parking spaces that are meant for sale but have not been sold by the balance sheet date.