A type of property (land or a building—or part of a building—or both) that is held (by the owner or by the lessee under a finance lease) for the sole purpose of earning rentals or for capital appreciation (increase in value over time) or both, rather than for an entity’s own use in the production or supply of goods or services or for administrative purposes or for the purpose of sale (held for sale) in the ordinary course of business.

The main examples of investment property include (1) land held for long-term capital appreciation rather than for short-term sale in the ordinary course of business and (2) land held for a currently undetermined future use, if the entity, holder of such a property, has not determined that it will use the land as owner-occupied property or for short-term sale in the ordinary course of business, the land is perceived to be held for capital appreciation.)