Explain the most suitable calculation method of depreciation

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Question - TONG accounting firm is in Malaysia and provides accounting service to LTS company. LTS company wants to acquire real estate and needs some advices. If you are stuff of TONG accounting firm, please clearly give advices to LTS company with these following issues related to IAS 16 - Property, Plant and Equipment.

1) Explain the definition of real estate and provide examples of real estate.

2) Explain the initial recognition of real estate and define costs which should be included in the cost of real estate.

3) Explain the subsequent recognition of real estate if LTS company uses Cost model. How should LTS  report this account in the statement of financial position?

4) Explain the most suitable calculation method of depreciation if LTS  needs the highest net income in statement of profit or loss.

Reference no: EM132920372

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