Madison Company acquired equipment on January 2, Year 1, at a cost of $20 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 4, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation) to be $12 million. Assuming that (1) the revaluation model is used for measurement subsequent to initial recognition under IFRS and (2) US GAAP: Depreciation expense for Year 4 will be:
Madison Company acquired equipment on January 2, Year 1, at a cost of $20 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 4, Jefferson Company determines the fair value of the asset (net of any accumulated depreciation) to be $12 million. Assuming that (1) the revaluation model is used for measurement subsequent to initial recognition under IFRS and (2) US GAAP: Depreciation expense for Year 4 will be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Madison Company acquired equipment on January 2, Year 1, at a cost of $20 million. The equipment has a five-year life, no residual value, and is
Assuming that (1) the revaluation model is used for measurement subsequent to initial recognition under IFRS and (2) US GAAP: Depreciation expense for Year 4 will be:
Select one:
a. US GAAP: 2000,000 IFRS 4,000,000
b. US GAAP: 4000,000 IFRS 6,000,000
c. US GAAP: 4000,000 IFRS 4,000,000
d. US GAAP: 2000,000 IFRS 2,000,000
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