Case 3: BackgroundYou 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 73 - 100 words) Case 3: BackgroundYou 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 73 - 100 words)