Sunrise Manufacturing Ltd, a Nigerian company, received a government grant of ₦24,000,000 on 1 January 2023 to acquire a machine costing ₦120,000,000 with a useful life of 10 years (straight-line, nil residual value). Using the deferred income approach under IAS 20, what amount will be recognised as grant income in the statement of profit or loss for the year ended 31 December 2023?

Under the deferred income approach in IAS 20, the grant of ₦24,000,000 is initially recognised as deferred income and released to profit or loss on a systematic basis over the asset's useful life of 10 years. Annual grant income = ₦24,000,000 ÷ 10 = ₦2,400,000. Recognising the full ₦24,000,000 immediately would violate the matching concept; ₦12,000,000 and ₦4,800,000 do not correspond to any correct application of IAS 20 to these figures.