How to deal with the change of fair value of investment real estate?

1. When the fair value of the investment real estate of the subsidiary changes, the parent company does not need to adjust the long-term equity investment. Because the parent company uses the cost method to handle the long-term equity investment, the change of the fair value of the subsidiary assets does not affect the book value of the long-term equity investment of the parent company.

2. At the time of consolidated statements, if the investment real estate of a subsidiary is leased by the parent company or other subsidiaries, it is only necessary to offset the rental income and rental expenses of both parties, without offsetting the changes in the investment real estate of the subsidiary and its fair value. Because even if the real estate is not leased to the Group, it will be leased to others, that is, the nature of real estate as an investment asset will not change, and the treatment of investment real estate will not change.