On January 1, 2014, Jackson Company has a building with a carrying value of $80,000 and a remaining useful life 5 years that was recently valued at $240,000. Assuming that the company uses straight-line depreciation, IFRS would show the depreciation as

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Under IFRS, revaluation of an asset to its fair value is allowed. If the building is revalued to $240,000 with a remaining useful life of 5 years, the annual depreciation would be $48,000 ($240,000 / 5 years). However, the original depreciation before revaluation would be $16,000 ($80,000 / 5 years). Therefore, both A and B could be correct depending on whether the revaluation is considered.

On January 1, 2014, Jackson Company Has a Building with a Carrying