Problem
On march 30th 2016 calvin exploration purchased a drilling machine for 00,000. the estimated useful life of the machine is 10 years and no residual value is anticipated. An important component of the machine is the drill housing component that will need to be replaced in five years. the 230,000 cost of the drill housing compononent is included in the 900,000 cost of the machine. calvin uses the straight line depreciation method for all machinery. The companys fiscal year ends on december 31.
1. Calculate depreciation on the drilling machine for 2016 and 2017 applying the typical U.s GAAP treatment.
2. Calcualte depreciation on the drilling machine for 2016 and 2017 applying IFRS.