How do I determined the useful life of Freehold Building?

Question

My company recently purchased a freehold land and building. The cost of the building is estimated as $2 million and the age of building was already 30 years old.

The previous owner did not provide any depreciation for the freehold building as he thought was not required. My question is how do I determined the useful life of the freehold building ? Can I depreciate the freehold building for the next 50 years or should I depreciate the freehold building for the next 20 years as it was already 30 years old?

Answer 1

It is up to the management to decide based on their judgement. In arriving at a judgement, management may get a professional opinion. So you may use a professional valuer / civil engineer to get an opinion as to the remaining useful life.