With reference to IFRS $5,$ define a discontinued operation and explain why the disclosure of such information is important to users of financial statements. $(5$ marks$)$

The consideration given by an investor to acquire an interest in an investee may be settled in different forms such as cash, deferred, share exchange or contingent consideration. The contingent consideration may be in the form equity or asset$/$liability$.$

Required:

e$.)$ Explain the distinction between the treatment of contingent consideration classified as equity and contingent consideration classified as either asset or liability. $(5$ marks$)$

QUESTION TWO $($Total: $30$ marks$)$

a$.)$ Enzo Ltd is an agro processing company, whose Head office isllion $($Land component: K$85$ million$).$ It is the policy of the company to realize revaluation surplus only upon derecognition of the non$-$current asset.

The disposal of the building and the current year revaluation of the remaining buildings are yet to be recorded in the books of the company. The consideration for the disposal of the building was received in the first week of January $2022.$

There were no other changes in the value of property, plant and equipment for the year ended $31$ December $2021.$

The trial balance excludes depreciation expense for the year ended $31$ December $2021$ on all non$-$current assets. Depreciation is charged to cost of sales. Motor vehicles, Machinery & equipment are all depreciated over five$-$years useful life.

iii.$)$ In lieu of cash dividend payment, the company on $1$ January $2021$ issued bonus shares of one new share for every ten existing shares held at the agreed price of K$1,$ subject to $8\%$ withholding tax on capitalisation of dividend. The $8\%$ tax withheld has been paid by the company, and it is included in administrative expenses. The bonus shares are yet to be recorded. The bonus shares are in respect of the year ended $31$ December $2020.$

The Board of Directors of the company has, however, immediately after $31$ December $2021,$ proposed dividend of K$0\mathrm{.}80$ per share in respect of the year ended $31$ December $2021.$ Shareholders are yet to approve the proposed dividend.

iv$.)$ Provision for tax represents the under$/$over provision of tax by the company, arising from differences in the tax provided for the year ended $31$ December $2020$ and the actual tax liability arising from tax audit for the $2020$ year of assessment. Current tax for the year ended $31$ December $2021$ is estimated at K$16\mathrm{.}7$ million. Taxable temporary differences ari