Question: Storage King commenced operations as a long-term self-storage facility for personal household belongings. The owner contributed Buildings of $20,000,000. They are estimated to have a

Storage King commenced operations as a long-term self-storage facility for personal household belongings. The owner contributed Buildings of $20,000,000. They are estimated to have a useful life of 20 years and no residual.

Required

The 2020 Conceptual Framework for financial reporting has five criteria for the definition and recognition requirements for the elements in these reports.

Use these five criteria to explain

(i) why these buildings are recorded initially as an asset and

(ii) why they must be expensed over time in the financial reports of Storage King.

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