Investment Property encompasses real estate such as buildings or land that an entity holds for the purpose of generating economic benefits through earning future rental income or through capital appreciation. Unlike properties held for operational purposes, like offices or manufacturing facilities, these assets are not used in day-to-day operations. Additionally, investment properties are distinct from inventory properties meant for sale during normal business operations. For example, a company might own an apartment building solely to lease out the units or own land that it expects to appreciate in value as a long-term investment. Another example of investment property is a commercial office space rented out entirely to another business.

In accounting, Investment Properties are often evaluated based on either a fair value model, where changes in market value are recognized periodically, or a cost model, where depreciation is accounted for over time while keeping the asset on the balance sheet at its initially recorded cost. Specific accounting standards, such as the International Financial Reporting Standards (IFRS), provide guidelines on how to account for and disclose these types of assets. Keeping detailed records and periodically assessing the investment property's valuation is crucial for regulatory compliance and financial planning.