Po River 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, 2016) the inventory had a market value of $400,000. During 2017 the market value recovered to an estimated $480,000.

Required

a. Assuming Po River uses GAAP, determine the book value and the amount of any gain or loss recognized on the 2016 and 2017 financial statements.

b. Assuming Po River uses IFRS, determine the book value and the amount of any gain or loss recognized on the 2016 and 2017 financial statements.