Read the following extract from an article about Bob Jane’s latest business venture:

He may have turned 80 but there’s no stopping Bob Jane from wheeling and dealing. He recently signed a heads of agreement document with senior Chinese government officials to build three car racing tracks within a single multi-purpose sports venue, car-warehousing facilities, an exhibition centre, accessory outlets and a finance house about 500 kilometres east of Beijing, in the Dalian Huayuankou Economic Zone.

The company Bob Jane (China) is party to an agreement to build a car-racing track capable of hosting a Formula 1 Grand Prix, an oval-shaped speedway and a drag-racing strip. He expects work to start within the next 12 months. ‘I refer to this centre as an automotive hub, and these multipurpose facilities will be available to the public and Chinese government officials,’ says Jane.

‘Besides hosting domestic motorsport events, people will learn how to drive at this centre, and police, government chauffeurs and public officials will be able to do additional training to sharpen up their road skills.

‘The centre will sell new cars, tyres, wheels and other accessories and will offer full-service repair workshops. This will be a state-of-the-art hub as China is committed to investing heavily in its automotive industry. China sees automotive growth as being tremendous, and I’m a small party to an investment which could grow to between US$20 billion and US$30 billion before it’s finished. The Chinese are also proposing to build a tennis centre, soccer stadium, golf course and yacht club within the same zone. This is the most exciting venture I’ve ever been involved in after more than 50 years in business and I will be spending much more time in China. We’ve only just started — I’ve only just signed the deal in Australia with senior Chinese government officials.’

Jane stresses that the deal is between him and Chinese government officials and does not involve his mostly franchised T-Marts tyre empire. Jane remains chairman of Bob Jane T-Marts, but the day-to-day operations are left to his son Rodney, who is chief executive and, like his father, a racing-car driver. Jane, who has been importing tyres from Europe, the US and China for about 45 years, sees his latest deal as an extension of a long business career that began with a leather goods business more than 50 years ago.

Required

By referring to definitions and recognition criteria of the elements of financial statements, as contained in the Conceptual Framework, discuss when and how Bob Jane’s business should account for the deal signed with the Chinese government officials.