1.1 Discuss the recognition criteria, measurement and disclosure requirements of a provision, in your discussion also define liability and provision (10 marks) 1.2 Identify whether the following can be recognised as either a contingent liability, provision or contingent asset? (5 marks) a) ABC Limited is expecting that 5% of each debtor's book value of R2000000 will not be recovered b) An employee was injured at work and is suing his company for R10 000000 . The lawyers have advised that it is unlikely that the claim will be unsuccessful. c) If a company has decided to restructure the division but has not informed the affected employees and there is no formal plan developed. d) A manufacturer offers a warranty to a customer for its products - the product warranty in the contract specifies the conditions under which the manufacturer will compensate for defective goods. e) Company A has filed a lawsuit against RT Ltd. There is a fair chance of Company A winning the case. How will it be recognized in the books of Company A? Use the information below to answer the required question INFORMATION 1. Plant was purchased on 2 January 2020 for R 100000 . The depreciation rate 10%, wear \& tear rate 20%. 2. Equipment was purchased on 30 June 2019 for R80000. The depreciation rate 20%, wear \&tear rate 25% 3. Land was Purchased for R200 000 on 1 January 2018. 4. The trade receivable balance as at 31 December 2021 was R35 000 . 5. Interest receivable as at 31 December 2022 is R10000 6. Dividends receivable balance from wholly owned subsidiary at 31 December 2022 for R7500 7. R400 000 is being claimed for residual damages from products sold. It seems likely that the company will have to pay for damages. The damages will be tax deductible. - Applicable tax rate for deferred tax purposes should be 28%. - Land is NOT depreciated and allowed by SARS to have any allowances. - Dividends are not taxable REQUIRED: Calculate deferred tax for the year ended 31 December 2021 and 2022