On January 1, 2005 a new accounting standard became the valid standard for all listed companies within the EU and among them the property companies. This means that the real estate business now appraise their property holdings at fair value, using the IAS 40 – Investment Property standard.The new IAS/IFRS standards opens up for a more subjective judgment, and appraisal at fair value is used to a greater extent. An important problem which should be acknowledged when appraising properties at fair value is the uncertainty that the appraisal is associated with.A description whether the property companies use the sales comparison approach or the income approach when appraising their property holdings have been given. And by reading annual reports and sending questionnaires to the listed property companies on the Swedish market a study has been made about how properties are appraised. Another aim was to find out if the standard has led to an increased comparability and a true and fair view.In the frame of reference, information taken from annual reports and other literature has been presented, in order to form statements further on. The types of references used are accounting concepts, standards and models of appraisal. A number of definitions as well as the meaning of having an appraisal made internally and externally have been discussed.The frame of reference is then followed by the empirical studies, where information derived from the annual reports has been combined with information provided by the respondents to our questionnaires. The respondents are not only represented by 13 companies but also by two auditors and Bo Nordlund, who is doing research within this field.The result of the study is first of all that the cash flow model is the one used by all companies, whereas the sales comparison approach is used only to estimate certain components in the cash flow model. Secondly,...
