Hillside Winery Inc. has inventory that cost $600,000. The aging process for the inventory requires several years.

Question:

Hillside Winery Inc. has inventory that cost $600,000. The aging process for the inventory requires several years. At the company’s closing date (December 31, 2013) the inventory had a market value of $500,000. During 2014 the market value recovered to an estimated $580,000.

Required
a. Assuming Hillside uses determine the book value and the amount of any gain or loss recognized on the 2013 and 2014 financial statements.
b. Assuming Hillside uses IFRS determine the book value and the amount of any gain or loss recognized on the 2013 and 2014 financial statements.

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...