The Birkby Company acquires a building as a donation from the City of Avalon. The controller argues that since there was no payment by the company, it is not necessary to record the asset and therefore no depreciation should be recorded. The company has to spend $15,000 altering the building to suit its unique needs. The controller argues that the
$15,000 should be expensed because if the building is sold or returned to the city, it cannot recover the $15,000. In addition, expensing the $15,000 results in a closer approximation of the apparent market value of the asset and reduces income taxes immediately.

Required
Write a short memo to the controller that evaluates each of the arguments made by the controller.