$4.$ Explain the differences between the inventory valuations reported under IFRS and U$.$S$.$ GAAP.

The inventory valuation reported under IFRS is

equal togreater thanless thangreater than

the inventory valuation reported under U$.$S$.$ GAAP. This difference arises because IFRS define market value as

actual costnet realizable valuereplacement cost or net realizable value minus a normal profit marginnet realizable value

and do not consider

actual costnet realizable valuereplacement cost or net realizable value minus a normal profit marginactual cost

$.$ Therefore, IFRS will result in market values that are always greater than or equal to those reported under U$.$S$.$ GAAP. Because some of the U$.$S$.$ GAAP inventory $($items $1,3,$ and $4)$ was valued at either replacement cost or net realizable value minus a normal profit margin, the IFRS lower of cost or market valuation of inventory will be

equal togreater thanless thangreater than

the U$.$S$.$ GAAP inventory valuation.