The Global Transactions Inc. (GTI) purchased an asset that cost $90,000 on January 1, 2013. The asset had a four year useful life and a $15,000 salvage value.
Required:
a. Determine the amount of expense recognized on the 2013 income statement assuming GTI uses U.S. GAAP.
b. Determine the amount of expense or gain recognized on the income statement assuming GTI uses the IFRS revaluation model and the asset is determined to have a fair value of $82,000 as of December 31, 2013.
c. Determine the amount of expense or gain recognized on the income statement assuming GTI uses the IFRS revaluation model and the asset is determined to have a fair value of $97,500 as of December 31, 2013.