To determine the amount at which inventory should be reported on the December 31, Year 1, balance sheet, Monroe Company compiles the following information for its inventory of Product Z on hand at that date:

Historical cost	$20,000
Replacement cost	14,000
Estimated selling price	17,000
Estimated costs to complete and sell	2,000
Normal profit margin as a percentage of selling price	20%

The entire inventory of Product Z that was on hand at December 31, Year 1, was completed in Year 2 at a cost of $1,800 and sold at a price of $17,150.

Required:

Determine the impact that Product Z has on income in Year 1 and in Year 2 under (1) IFRS and (2) U.S. GAAP.

Summarize and discuss the difference in income, total assets, and total stockholders' equity using the two different sets of accounting rules over the two-year period.