IFRSIAS 16
Typical useful life20–40 years, depending on construction type and use
Permitted methodsStraight-line is standard; units-of-production is used only when wear tracks output directly
Component approachRequired when components have materially different useful lives (roof, HVAC, structure) — each component is depreciated separately
RevaluationPermitted under the revaluation model; increases go to other comprehensive income and the revaluation surplus, not profit or loss
Residual value reviewUseful life, residual value, and method reviewed at least annually
Impairment
Impairment is tested when indicators exist. A single-step recoverable-amount test compares carrying amount to the higher of fair value less costs of disposal and value in use. Reversals of a prior impairment loss are permitted (except for goodwill) if the recoverable amount increases.
US GAAPASC 360
Typical useful life20–40 years, based on management's estimate of the building's service life
Permitted methodsStraight-line dominates in practice; units-of-production and accelerated methods are allowed but rare for buildings
Component approachNot required — GAAP depreciates the building as a single unit unless the company voluntarily elects component depreciation
RevaluationProhibited — buildings stay at historical cost less accumulated depreciation; no upward revaluation
Residual value reviewUseful life and residual value are reviewed only when a triggering event suggests the original estimate no longer holds
Impairment
ASC 360 uses a two-step test: first, a recoverability test compares undiscounted future cash flows to carrying amount; if the asset fails, a second step measures the loss as carrying amount less fair value. Once recognized, the loss can never be reversed.