JJS Corporation purchased a building on January 1, 2011, for a total of $12,000,000. The building has been depreciated using the straight-line method with a 20-year useful life and no residual value. As of January 1, 2015, JJS is evaluating the building for possible impairment. The building has a remaining useful life of 12 years and is expected to generate cash inflows of $850,000 per year. The estimated fair value of the building on January 1, 2015, is $6,800,000.

Instructions:

1. Determine whether the building is impaired as of January 1, 2015. Make your determination using the provisions of both U.S. GAAP and IAS 36. Compare your answers.

2. Assume that JJS uses U.S. GAAP. Compute depreciation expense for 2015. (Note: Don't forget the new information on the expected useful life of the building.)

3. Assume that JJS is a non-U.S. company and uses International Accounting Standards. Compute depreciation expense for 2015.

4. Assume that JJS is a non-U.S. company and uses International Accounting Standards. Further assume that the building has a fair value of $14,000,000 on January 1, 2015, and that JJS chooses to upwardly revalue its long-term operating assets when they increase in value. Compute depreciation expense for 2015.