Pakistan Ltd. Co. is leading manufacturing company and listed in Pakistan stock Exchange .Listed co. is bound to follow IAS/IFRS. Company Account department facing some issue of IAS 16. Pakistan company purchased Building worth Rs. 20 million on March 15, 2015. Legal Expense on procession of Building was Rs. 2 million , commission on Purchase was Rs. 1 million . The value of Land was Rs. 5 million. Salvage value is estimated Rs.2 million. Life of Building was 10 years but company policy is to use all Asset for maximum 5 years. Building sold Rs.9 million on November 15 ,2019. Accounting year of Pakistan Ltd Co. is January 1 till December 31.

Requirement 1: Definition of Asset, as per IAS 16

2: Journal Entries using Cost method

3:Pass journal entries if Depreciation rate is 20% accelerated Method.

Pakistan Ltd Co. had Machine worth Rs. 5 million, purchased on March 1, life of Machine was 7 year, no salvage value is anticipated .

4: Pass journal entries if output of each year was same 100,000 units

Note : Pakistan Ltd. Copolicy is same for all Assets.