$$As we were preparing for our physical inventory, we discovered inventory that appears to have been manually added to our physical inventory at a cost of $$850,000$ after the most recent inventory count. This inventory consists of unique products that are new to our inventory management system and as such, it has not been tracked and managed effectively in every aspect, including locations, orders, movement, carrying costs and the realizable values $($Exhibit VIIEXHIBIT I

DRAFT BALANCE SHEET

Emily has received Tylor Corp's draft balance sheet $($this Exhibit$)$ and statement of

comprehensive income $($Exhibit II$)$ for the year ended December $31,2023$ ahead of the next

management meeting.$).$ In total, we estimate the inventory$$s current selling price to be $$960,000.$ I just wanted to EXHIBIT VII

MANULLY ADDED INVENTORY

Ignore the cost to sell.

bring this to everyone$$s attention. I do not think this will negatively impact our financial statements but perhaps, this is something Emily should look at further.$$

$$Well$,$ that closes our meeting. Emily, for purposes of your report, focus on the effect these transactions will have on our year$-$end income and first quarter earnings. Remember, markets do not like surprises. As part of your report, provide any relevant information for the accounting group that they may need to reflect these adjustments in our accounts.

Please tell me what IFRS rule should apply and make the adjusting entries.