Sejenis Ltd constructed a building for use by its freight department. The completion date was 1 July 2017, and the construction cost was \(\$ 840000\). The company expected to remain in the building for the next 20 years, at which time the building would probably have no real salvage value.
In December 2023, following some severe weather in the city, the roof of the administration building was considered to be in poor shape so the company decided to replace it. On 1 July 2024, a new roof was installed at a cost of \(\$ 220000\). The new roof was of a different material to the old roof, which was estimated to have cost only \(\$ 140000\) in the original construction, although at the time of construction it was thought that the roof would last for the 20 years that the company expected to use the building. Because the company had spent the money replacing the roof, it thought that it would delay construction of a new building, thereby extending the original life of the building from 20 years to 25 years.
Required Discuss how you would account for the depreciation of the building and how the replacement of the roof would affect the depreciation calculations.