I need to understand the answer to 6b.

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Required: a. Determine which adjustment, (1) or (2), relates to which it described in the excerpt. Explain your answer b. What impact would items (a) and (b) have on the reconcii nciliation of net assets (stockholders' equity) from PRC GAAP to IFRS? 6. China Eastern Airlines (CEA) Corporation Limited prepares a set of fin RMB). Until 2007 statements in accordance with IFRS (in Chinese re the company also provided a reconciliation of IFRS net inco U.S. GAAP The following excerpt was taken from a recent annual report Required: a. Explain the difference between (1) IFRS net income and U.S. GAAP net come and (2) IFRS net assets (owners' equity) and U.S. GAAP net asse resulted from the accounting difference related to "revaluation of fixed assets 5 b. Determine the directional impact (increase, decrease, no effect) the account ing difference described above would have on the following ratios calculated under IFRS and U.S. GAAP: Current ratio (Current assets/Current liabilities) Debt-to-equity ratio (Total liabilities/Total owners' equity otal asset turnover (Net sales/Average total assets) Required: a. Determine which adjustment, (1) or (2), relates to which it described in the excerpt. Explain your answer b. What impact would items (a) and (b) have on the reconcii nciliation of net assets (stockholders' equity) from PRC GAAP to IFRS? 6. China Eastern Airlines (CEA) Corporation Limited prepares a set of fin RMB). Until 2007 statements in accordance with IFRS (in Chinese re the company also provided a reconciliation of IFRS net inco U.S. GAAP The following excerpt was taken from a recent annual report Required: a. Explain the difference between (1) IFRS net income and U.S. GAAP net come and (2) IFRS net assets (owners' equity) and U.S. GAAP net asse resulted from the accounting difference related to "revaluation of fixed assets 5 b. Determine the directional impact (increase, decrease, no effect) the account ing difference described above would have on the following ratios calculated under IFRS and U.S. GAAP: Current ratio (Current assets/Current liabilities) Debt-to-equity ratio (Total liabilities/Total owners' equity otal asset turnover (Net sales/Average total assets)