McDonald Corp. owns a building with an original cost of $2,000,000 and accumulated depreciation at the balance sheet date of $300,000. Based on a recent appraisal, the fair value of the building is $1,800,000.
REQUIRED:
1. At what amount will the building be reported on the year-end balance sheet if McDonald follows U.S. GAAP?
2. Does McDonald have a choice in the amount to report for the building if instead it follows IFRS? What are those choices?

Question

Quizplus · Accepted Answer

The Answer of McDonald Corp. owns a building with an original cost of $2,000,000 and accumulated depreciation at the balance sheet date of $300,000. Based on a recent appraisal, the fair value of the building is $1,800,000.
REQUIRED:
1. At what amount will the building be reported on the year-end balance sheet if McDonald follows U.S. GAAP?
2. Does McDonald have a choice in the amount to report for the building if instead it follows IFRS? What are those choices?