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Accounting GAAPs and Accounting Treatments for Management of Property: Case Studies from Greek Real Estate Market

Author

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  • Konstantinos J. Liapis
  • Christos L.Galanos

Abstract

The present article reconciles the GAAP3 to each other, which apply to accounting recording of fixed assets. It separates the fixed assets, from the side of buyer, as Own Used, Investments, and Inventories and integrates these types of assets into four main portfolio categories. It examines, what are the features to incorporate an element of fixed assets in these portfolios. It analyzes the accounting treatments for each portfolio transaction and the impact of any accounting entry to equity and profit and loss account. It presents the key accounting profitability metrics for any kind of fixed asset. The subject of the article focuses on land and buildings as main part of the total fixed assets of a company. It discusses the influence of taxations and other expenditures at purchase time on the cost and tries to establish a purchase price allocation method for property acquisition. It describes the accounting entries for the revenues, expenses and valuations per portfolio. It makes a comparative analysis between Greek GAAP, IFRS4 and U.S GAAP for accounting treatments of fixed assets. Finally, it uses the framework of Greek Real Estate Market as experimental setting where the principles of Historic Cost and Fair Value Accounting can be compared. The contribution of this article is that it surveys from a critical perspective, principles, literature and the practice about all the above issues, and presents from accounting point of view a way to managing and monitoring real estate investments.

Suggested Citation

  • Konstantinos J. Liapis & Christos L.Galanos, 2010. "Accounting GAAPs and Accounting Treatments for Management of Property: Case Studies from Greek Real Estate Market," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 169-194.
  • Handle: RePEc:ers:journl:v:xiii:y:2010:i:3:p:169-194
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    References listed on IDEAS

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    1. Y.C. Lin & Ken V. Peasnell, 2000. "Fixed Asset Revaluation and Equity Depletion in the UK," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(3-4), pages 359-394.
    2. Missonier-Piera, Franck, 2007. "Reply to discussion of "Motives for fixed asset revaluation: An empirical analysis with Swiss data"," The International Journal of Accounting, Elsevier, vol. 42(2), pages 210-212.
    3. Jo Danbolt & William Rees, 2008. "An Experiment in Fair Value Accounting: UK Investment Vehicles," European Accounting Review, Taylor & Francis Journals, vol. 17(2), pages 271-303.
    4. Y.C. Lin & Ken V. Peasnell, 2000. "Fixed Asset Revaluation and Equity Depletion in the UK," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(3‐4), pages 359-394, April.
    5. Easton, Pd & Eddey, Ph & Harris, Ts, 1993. "An Investigation Of Revaluations Of Tangible Long-Lived Assets," Journal of Accounting Research, Wiley Blackwell, vol. 31, pages 1-38.
    6. Y.C. Lin & Ken V. Peasnell, 2000. "Fixed Asset Revaluation and Equity Depletion in the UK," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(3&4), pages 359-394.
    7. Missonier-Piera, Franck, 2007. "Motives for fixed-asset revaluation: An empirical analysis with Swiss data," The International Journal of Accounting, Elsevier, vol. 42(2), pages 186-205.
    8. Richard Dietrich, J. & Harris, Mary S. & MullerIII, Karl A., 2000. "The reliability of investment property fair value estimates," Journal of Accounting and Economics, Elsevier, vol. 30(2), pages 125-158, October.
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    Cited by:

    1. Kostantinos J. Liapis & Evangelos D. Politis & Dimitra Ntertsou & Eleftherios I. Thalassinos, 2020. "Investigating the Relationship between Tax Revenues and Tax Ratios: An Empirical Research for Selected OECD Countries," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 215-229.
    2. Eugenia Iancu & Mihaela Tulvinschi, 2013. "The Role of the Accounting and Audit Standards in the Globalization Process," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 83-96.

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    More about this item

    Keywords

    Accounting Principles; Accounting based valuation; Real Estate; fixed Assets; Property Management;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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