The Piccolo Mondo Company purchased a computer system for $150,000. The company expects to use the system for five years, at which time it will acquire a larger and faster one. The new system is expected to cost $100,000. During the current year, the company debited $20,000 to its depreciation expense account "to provide for one-fifth of the estimated cost of the new computer system."
Is this in accordance with IFRS? If so, briefly explain why. If not, identify the accounting principle or concept that has been violated and give a brief explanation of the nature of the violation.