Case 3: Background: You are working as an accountant in New Oman SAOC that prints paper inaterial for several customers. Its accounting year ends on 31" December each year. Your team only focuses on accounting treatment related to Non-current assets. Below are certain issues faced by the company that needs your attention and recommendation for appropriate treatment? The Company bought a printing press from Germany for RO 175,000. The other charges incurred were custom duty of 2% on the purchase price, transportation cost of 6,500 and installation cost of RO 15,000. The company also paid refundable tax of RO 5,000 on such purchase. This is installed and ready for use on 1" July 2018, Management estimate the press will have a useful life of 15 years and a residual value of RO 35,000 On 31" December 2019 the management found that due to over-capacity in the industry the market value of the new printing press was just RO 160,000. This printing press is a well- known model and the second-hand market value can be estimated reliably by taking 90% of its market value. The value in use is estimated to be RO 130,000 There was an increase in demand due to a major contract received by the company in the year 2020 whach required the company to operate the press under three shifts from the beginning of the year itself. Due to such increased operations they reduce the overall expectation of useful life of the machine to 10 years and the estimated residual value to RO 24,000 Your task is to show how the asset will be accounted for under the provisions of LAS 16 and IAS 36 in the company's year-end accounts year 2018, 2019 & 2020. (8 marks) Apart from the above the manager needs to know how such situations will affect the financial performance of the business for the year 2019 and 2020. (2 marks Min 75-100 words) Case 3: Background: You are working as an accountant in Oman Boating & dive centre SAOC that operates a ferry services in the coastal regions of Oman. Its accounting year ends on 31* December each year. Your team only focuses on accounting treatment related to Non- current assets. Below are certain issues faced by the company that needs your attention and recommendation for appropriate treatment? Situation 1: There were some ferries purchased second-hand on 1 April 2014 for RO 125,000 and at the time was estimated to have an economic life of 10 years and a residual value of RO 12,000. At 1 January 2019, because of a surge in the price of steel it comes to light that the scrap value of the vessel is RO 42,000. Management continue operating the ferry. Objective: To show how the asset will be accounted for under IAS 16 in the company's annual accounts for the year 2019 & 2020 (4 marks) Situation 2: The company owns and operate an item of boating equipment that cost RO 640,000 as on 1* January 2014. It is being depreciated @ 12.5% per annum on cost. On 1* October 2019 the equipment was damaged when one of the center vehicles collided into it. Based on the damage, the estimated value of the equipment in use is RO 150,000 and it has a current disposal value of RO 20,000, but the company has been offered a trade-in-value of RO 180,000 if it upgrades which the company is likely to do. Objective: To show how the asset will be accounted for under IAS 16 and IAS 36 in the company's year-end accounts for the year 2019 & 2020. Also identify and mention necessary conditions for such treatments (4 marks) Apart from the above the manager needs to know how such situations will affect the financial performance of the business for the year 2019. (2 marks Min 75 100 words)