II. Reported Income: IFRS vs. US GAAP Derek Jeter is CFO of Yankee Bats, Inc. The company is evaluating how a switch from US GAAP to IFRS would impact company income. Mr. Jeter went to Niagara College and is not familiar with differences between the two sets of standards so he has asked you to research the following company activities. He asks that you discuss whether 2020 net income would likely be higher or lower with a switch to IFRS. Mr. Jeter wants to look good to his boss, Mrs. Steinburner, so make sure to explain WHY you concluded what you did. 1. The company currently uses LIFO for inventory reporting. 2. The company is developing a new bat made primarily of steel. It is heavier than wood or aluminum bats, but the ball really jumps off this bat. The research was concluded in June 2019, and the development stage began in July 2019. At December 31, 2019, the project was deemed to be both technically and economically feasible. The development stage is scheduled to be finalized in December 2020. 3. The company purchases a major asset in 2020 that has three separate components with different useful lives. 4. On January 1, 2020, the company leases a new office building. The lease agreement qualifies as an operating lease under US GAAP. 5. The company has an international subsidiary located in Ireland where the corporate tax rate is significantly lower than the United States. The company expects this subsidiary to be extremely profitable in 2020.