CERTYNEX IFRS ACADEMY

Nestara receives a non-taxable government grant of 90,000 for a machine costing 450,000; under the method used in the case, the grant is deducted from the carrying amount of the machine, but not from its tax base. Which statements are correct at the outset?

IAS 12 requires the grant to be deducted from the carrying amount of the asset.

The carrying amount of the machine (360,000) is lower than its tax base (450,000).

A deductible temporary difference of 90,000 arises.

A taxable temporary difference of 90,000 arises.

IAS 12 deals with the temporary differences that the grant gives rise to.