Useful life

[E. Dantes]

Does anyone know what the useful life (recovery period) of a "building improvement" would be from a book standpoint and a tax standpoint? The building is owned (i.e., not a leasehold).

For the tax perspective, I referred to IRS Pub. 946 but could not find anything conclusive. Please advise.

 

[bklynboy]

I dont know tax but for US GAAP book, management needs to come up with the useful life as there is no schedule that is required to be used. If you own the property, then you need to determine how long the improvement will last. Your company should have set a policy around this item. If they haven't then I suggest a policy be initiated. If you detail what the improvement is we can provide what other companies utilize as useful life as a starting point. Also, its not a "recovery" period but the period over which the asset will be used up (recovery is the salvage value).