Ilmanov Ltd. sold a building to a bank at the beginning of 2011 at a gain of $50,000 and immediately leased the building back for a period of five years. The lease is accounted for as an operating lease.
a. Determine the amount of gain on the sale and leaseback that Ilmanov should recognize in 2011 under (1) U.S. GAAP and (2) IFRS.
b. Determine the adjustments that Ilmanov would make in 2011 and 2012 to reconcile net income and stockholders' equity under U.S. GAAP to IFRS.