Delmarva Company is a U.S.-based company that prepares its consolidated financial statements in accordance with U.S. GAAP. The company reported income in 2015 of $6,000,000 and stockholders equity at December 31, 2015 of $50,000,000.

The CFO of Delmarva has learned that the that the U.S. Securities and Exchange Commission is considering requiring U.S. companies to use IFRS in preparing consolidated financial statements. The company wishes to determine the impact that a switch to IFRS would have on its financial statements and has engaged you to prepare a reconciliation of income and stockholders equity from U.S. GAAP to IFRS. You have identified the following four areas in which Delmarvas accounting principles based on U.S. GAAP differ from IFRS:

Restructuring

Pension plan

Stock options

Bonds payable

Delmarva provides the following information with respect to each of these accounting differences:

Restructuring Provision

Delmarva publicly announced a restructuring plan in 2015 that created a valid expectation on the part of the employees to be terminated that the company will carry out the restructuring. The company estimated that the restructuring will cost $500,000. No legal obligation to restructure exists as of December 31, 2015.

Pension Plan

In 2013, the company amended its pension plan, creating a past service cost of $90,000. The past service cost was attributable to already vested employees who had an average remaining service life of 15 years. The company has no retired employees.

Stock Options

Stock options were granted to key officers on January 1, 2015. The grant date fair value per option was $12, and a total of 15,000 options were granted. The options vest in equal installments over three years: one-third vest at the end of 2015, one-third vest at the end of 2016, and one-third vest at the end of 2017. The company uses a straight-line method to recognize compensation expense related to stock options.

Bonds Payable

On January 1, 2014, Delmarva issued $12,000,000 of 6 percent bonds at par value that mature in five years on December 31, 2018. Costs incurred in issuing the bonds were $600,000. Interest is paid on the bonds annually.

Required:Prepare a reconciliation schedule to convert 2015 income and December 31, 2015, stockholders equity from a U.S. GAAP basis to IFRS (i.e. show the individual effect of each area of difference in accounting principles on Delmarvas net income and stockholders equity). Ignore income taxes.