You are appointed as accounts executive in pak fans pvt. Ltd. On the first day of your job you are tlod that company bought machinery on 01 July 2013 for PKR 1,500,000 from China. The delivery and flight cost of plant to bring the plant in Pakistan was PKR 400,000. Further PKR 500,00 was spent on Freight to bring and assemble plant in Kot Lakhput, Lhr. You are also told that cost of the trail production was PKR 100,000. At that time the management decided that plant will have useful life of 5 years and machinery than can be disposed of for 500,000. Required: 1) Define depreciation in accordance with U IAS 16 and also explain rational behind charging depreciation. 2) using straight line method, calculate depreciation charge carrying value for each year starting from 30 June 2014 till 30 June 2018. Using reducing balance method calculate depreciation charge carrying value of each year starting from 30 June 2014 till 30 June 2018.