SMC Company purchases a building for $100,000. Included in this cost are $12,000 for electrical systems and

Question:

SMC Company purchases a building for $100,000. Included in this cost are $12,000 for electrical systems and $15,000 for the roof. The building is expected to have a 40-year useful life, but the electrical system will last for 20 years and the roof will last 15 years.

Required:
A. Assuming that straight-line depreciation is used, compute depreciation expense assuming that U.S. is used.
B. Assuming that straight-line depreciation is used, compute depreciation expense for year one assuming IFRS is used (assume component depreciation).

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...