Question at the bottom, I need to convert GAAP operating income to IFRS. Please help.

To create the pro forma information, assume the following.

• Beginning in fiscal 2007, 30% of Navistars total R&D expenditures could be considered product development costs and would be eligible for capitalization under IAS 38.
• Internal forecasts predict that capitalized product development costs have an estimated useful life of four years. Had Navistar followed IAS 38, they would have amortized the development costs on a straight-line basis over four years, beginning the year after capitalization.
• Your analysis should consider only the impact of adopting IAS 38. All other Navistar activity is reported using U.S. GAAP.

(in US $ millions)	2007	2008	2009
Total R&D costs incurred during the year expensed in the income statement	375	384	433
Net sales, manufactured products	11,910	14,399	11,300
Total Assets	11,448	10,390	10,028
Operating income before tax	(73)	191	359

(In US $ Millions)	2007	2008	2009
Capitalized R&D Expenditures under IAS 38 (30%)	112,500	115,200	129,900

i. What would Navistar have reported as Operating income before tax in fiscal 2007, 2008,

and 2009 under IFRS? Is the difference significant?