Problem

GAAP vs IFRSEvans Winery Inc, has inventory that cost $500,000. The aging process for the...

GAAP vs IFRS

Evans Winery Inc, has inventory that cost $500,000. The aging process for the inventory requires several years. At the company’s closing date (December 31, 2011) the inventory had a market value of $400,000. During 2012 the market value recovered to an estimated $480,000.

Required

a.     Assuming Evans uses GAAP, determine the book value and the amount of any gain or loss recognized on the 2011 and 2012 financial statements.


b. Assuming Evans uses IFRS, determine the book value and the amount of any gain or loss recognized on the 2011 and 2012 financial statements.

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