WHAT ARE THE US GAAP RULES FOR DEPRECIATION OF A FIXED ASSET THAT HAS AN EXTENDED PERIOD OF NON-USE?

Chiefly, I’d similar to to know what happens when we move the item (in this box the building) behind in to service. How do we work out the brand new item base?

{ 1 comment… read it below or add one }

marquiño April 16, 2010 at 2:32 pm

1.If the asset is not fully depreciated:
If you are using straight-line depreciation, it doesn’t matter if you are using the asset or not, you have to stick to the original depreciation estimation of its useful life.

2. If the asset is fully depreciated:
An asset that is fully depreciated and continues to be used in the business will be reported on the balance sheet at its cost along with its accumulated depreciation. There will be no depreciation expense recorded after the asset is fully depreciated. No entry is required until the asset is disposed of through retirement, sale, salvage, etc.

Regarding the revaluation of the building: IFRS generally allows revaluations of assets while US GAAP does not.

Hope that helps!

Leave a Comment

Previous post:

Next post:

http://www.maxprofitsinvest.com