Po River Winery Inc. has inventory that cost $500,000. The aging process for the inventory requires several years. At the end of Year 1, the inventory had a market value of $400,000. During Year 2, 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 Year 1 and Year 2 financial statements.
b. Assuming Po River uses IFRS, determine the book value and the amount of any gain or loss recognized on the Year 1 and Year 2 financial statements.