On 1 January 2011, Marine Limited took delivery of its newly constructed luxury ocean-liner (African Queen II) at a cost of R5 000 million. Marine Limited has operated numerous luxury ocean-liners across the seven seas of the world for over fifty years and in order to maintain its reputation as the most elite of ocean-liners it replaces its ocean-liners every ten years even though the economic life of ocean-liners is proven to be approximately fifty years. The residual value of African Queen II was appropriately determined to be: R4 000 million on 31 December 2016, 2017 and 2018; R4 850 million on 31 December 2019. On 31 December 2020, because of declining demand for ocean-liner services resulting from the extended global economic downturn arising from world Covid 19 Pandemic, Marine Limited decided that it would continue to use African Queen II for a further ten years (ie a total useful life of 15 years). On 31 December 2020, the fair value of an equivalent ocean-liner that is: 5 years old is R3 200 million, 10 years old is R3 000 million, and 15 years old is R2 000 million. If Marine Limited was to sell the African Queen II on 31 December 2020, selling expenses of R320 million would be incurred. At 31 December 2020, Marine Limited appropriately estimated the expected future net operating cash flows of keeping the African Queen II in use to be an inflow of R500 million per annum and that the African Queen II will realise upon disposal R2 500 million (net of disposal costs) ten years hence (ie on the expected date of disposal). An appropriate discount rate is 9% per annum. Required: Discuss how Marine Limited should account for the African Queen II in its 31 December 20.5 company financial statements. Your answer should be limited to the recognition and measurement issues only (ie ignore presentation and disclosure).