On $1$ January $2019$ Hermes $($the Lessor$)$ began to lease a property on a $40-$year lease to a Lessee. The fair value of the leasehold interest was allocated $30$:$70$ between land and building elements.By the end of the lease term the property will be returned to Hermes, but the building is likely to become dilapidated and would require demolition.Lease payments of $$2$ million are payable in arrears on $31$ December $($the first payment is due on $31$ December $2019).$ In addition, the Lessee paid an unrecoverable deposit of $$10$ million on $1$ January $2019.$ Interest rate implicit in the lease contract is $6\%.$ Cumulative discounted value of $$1$ receivable at the end of each of the $40$ years at interest rate of $6\%$ equals $$15.$RequiredExplain, providing relevant calculations and extracts from the financial statements, how the above described lease should be treated in the financial statements of Hermes $($the Lessor$)$ for the year ended $31$ December $2019.$