How is investment property accounted for under IAS 40?

IAS 40 allows entities to choose between two models for investment property after initial recognition at cost:

1. Cost Model: Accounted for in accordance with IAS 16 (Cost less accumulated depreciation and impairment).
2. Fair Value Model: Measured at fair value at each reporting date. Any gains or losses arising from changes in fair value must be recognized directly in profit or loss for the period in which they arise. No depreciation is charged under the fair value model.