1. Describe the critical role of international perspectives in the application of accounting.

2. Improve your skills related to global financial information.

3. Discuss the need for the creation of uniform accounting standards of international application.

On June 30, 2018, ABC Co. purchased a machine for $120,000. The estimated useful life of the machine is 8 years and no residual value. An important component of the machine is a specialized hight-speed drill that will need to be replaced in 4 years. The $20,000 cost of the drill is included in the $120,000 cost of the machine. ABC uses the straight line depreciation method.

Required:

US GAAP

1. Determine the depreciation expense for 2018 and 2019.

IFRS

2. All information remains the same except: suppose ABC depreciates the drill using: units of production. The estimates total units are 150,000. For 2018 and 2019 the units produced was 80,000 and 40,000, respectively .

a. Determine the depreciation expense for 2018 and 2019.