Delta is an entity which is engaged in the construction industry and prepares financial statements to 30 September each year. The financial statements for the year ended 30 September 2015 are shortly to be authorised for issue. The following events are relevant to these financial statements:

(a) On 1 October 2000, Delta purchased a large property for $20 million and immediately began to lease the property to Epsilon on an operating lease. Annual rentals were $2 million. On 30 September 2014, the fair value of the property was $26 million. Under the terms of the lease, Epsilon was able to cancel the lease by giving six months’ notice in writing to Delta. Epsilon gave this notice on 30 September 2014 and vacated the property on 31 March 2015. On 31 March 2015, the fair value of the property was $29 million. On 1 April 2015, Delta immediately began to convert the property into ten separate flats of equal size which Delta intended to sell in the ordinary course of its business. Delta spent a total of $6 million on this conversion project between 31 March 2015 and 30 September 2015. The project was incomplete at 30 September 2015 and the directors of Delta estimate that they need to spend a further $4 million to complete the project, after which each flat could be sold for $5 million. Delta uses the fair value model to measure property whenever permitted by International Financial Reporting Standards. (9 marks)

Required:
Explain and show how the three events would be reported in the financial statements of Delta for the year ended 30 September 2015.

Note: The mark allocation is shown against each of the three events above.