Final Answer:
Yes, the company still needs to determine the fair value of the property.
Step-by-step explanation:
Even when using the cost model for accounting purposes, determining the fair value of investment property remains crucial. Firstly, while the cost model helps in reporting assets at their historical cost less accumulated depreciation, it might not reflect the current market value accurately.
The fair value accounts for fluctuations in the property market, offering a more realistic picture of its current worth. This valuation is particularly important for stakeholders, investors, and creditors who seek up-to-date and relevant information about the property's actual value.
Moreover, certain circumstances might necessitate fair value determination, such as when a property undergoes revaluation or when there's an indication of impairment. Revaluation involves assessing the property's market value periodically to ensure it aligns with the current market conditions.
In case the property's value declines significantly below its carrying amount, an impairment loss needs recognition, which necessitates fair value determination. Ultimately, determining fair value provides a comprehensive understanding of the property's economic worth, enabling informed decision-making and ensuring accurate financial reporting.