Exercise $15\mathrm{.}13($Algo$)$ Financial Statement Harmonization $($LO$15-2,$ LO$15-3)$

Refer to Exhibit $156$ in this chapter. Assume a United Kingdom company, Brits International, lists on the London Exchange using UK GAAP and the New York Stock Exchange using IFRS. Assume that Brits revalues its fixed assets at the end of each reporting period. The revaluation resulted in the company$$s fixed assets being revalued $$525,440$ higher than historical cost, which resulted in $$49,300$ of additional depreciation for the current year and $$328,233$ additional depreciation in prior years.

Net Income Shareholders$$ Equity

UK IFRS balances $ $784,900$ $ $4,769,600$

US GAAP adjustments:

a$.$ Revaluation of fixed assets

b$.$ Additional depreciation charges

US GAAP balances

Required:

What amount of Net Income would Brits International have reported under U$.$S$.$ GAAP?

What amount of Shareholders' Equity would Brits International have reported under U$.$S$.$ GAAP? $($EXHIBIT $156$ Global Variation in Accounting Practices

Country GAAP Fixed Asset

Revaluation

Allowed LIFO

Allowed

IFRS Yes No

United States No Yes

United Kingdom Yes No

Japan No No$)$