Hirsch Company acquired equipment at the beginning of 2017 at a cost of $135,000 The equipment has a five year life with no expected salvage value and is depreciated on a straight line basis At December 31, 2017, Hirsch compiled the following information related to this equipment Expected future ca...

Summary of facts Cost of equipment 1117 135000 Salvage value zero Useful life 5 years Depreciation expense 2017 27000 Carrying amount 123117 108000 Expected future cash flows 123117 116000 PV of expec ...

Hirsch Company acquired equipment at the beginning of 2017 at a cost of $135,000. The equipment has

Question:

Hirsch Company acquired equipment at the beginning of 2017 at a cost of $135,000. The equipment has a five-year life with no expected and is depreciated on a straight-line basis. At December 31, 2017, Hirsch compiled the following information related to this equipment:
Expected future cash flows from use of the equipment ........................ $116,000
Present value of expected future cash flows from use of the equipment ..... 100,000
Fair value (selling price less costs to dispose) ................................... 96,600
a. Determine the appropriate accounting for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. and (2) IFRS.
b. Prepare the entry(ies) that Hirsch would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. balances to IFRS. Ignore the possibility of any additional impairment at the end of 2018.
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... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...