You work in the Accounting Policy Group of Radley International, Inc., a U.S. publicly-held manufacturer of women's handbags and other fashion accessories. In February 2020, Radley acquired Carlson International, Ltd., a UK-based company that is listed on the London Stock Exchange and NASDAQ. Carlson prepares its consolidated financial statements in accordance with IFRS. You have been assigned to the acquisition team based upon your in-depth knowledge of both U.S. GAAP and IFRS. Your role is to assist your peers at Carlson to prepare Income Statements under both IFRSandUS GAAP.

After detailed discussions with the Controller of Carlson and their financial reporting team, you identify the key differences between IFRS and U.S. GAAP for 2019. Your summary is below:

IAS 2: Inventories

The ending inventory at December 31, 2019 was $125,000, which represents historical cost using FIFO. Further analysis indicates the following: (1) replacement cost of $90,000, (2) net realizable value of $95,000, and (3) normal profit margin is 20 percent of NRV.For U.S. GAAP purposes, Carlson uses the Lower of Cost or NRV method (LCNRV) to measure inventory. (As noted in the text, the inventory items are related to similar product lines and, accordingly, Carlson can perform these tests at the "Group" level rather than an item-by-item basis).

What is the adjustment?