SDDS Wiring-Guide

Definition:

Under the fair value model, acquisition expenses of an investment property are effectively charged to income when fair value is calculated at the first subsequent measurement date after acquisition. This results in the fair value of a property on subsequent fair value measurement being lower than the total purchase price of the property, all other things being equal. 
Property acquisition expenses should be capitalised and amortised over the first five years after acquisition of the property. 

The rationale to capitalise and amortise acquisition expenses is to better reflect the duration of the economic benefits to the vehicle of these costs.   

When capitalising and amortising acquisition costs, a possible impairment test should be taken into account every time the adjusted NAV is calculated when market circumstances change and it is not expected that the capitalised acquisition costs can be utilised with the sale of units of a vehicle.  When a property is sold during the amortisation period or is classified as held for sale, the balance of capitalised acquisition expenses of that property should be expensed.