Space Limited owns an office park that it developed during the current reporting period at a cost of R200 million. Space Limited’s head office is situated in the office park in a standalone building. The balance of the office park is let out to tenants under non-cancellable operating leases that vary in duration between 3 and 5 years. Space Limited intends keeping the office park in its existing use indefinitely.

Required:
Write a letter to the financial director of Space Limited in which you set out how Space Limited should account for the office park. Limit your discussion to the recognition and measurement Issues (ignore presentation and disclosure)
Ignore all taxations