Xanxi Petrochemical Company provided the following reconciliation from IFRS to U.S. GAAP in its most recent annual report (amounts in thousands of RMB):
Shareholders' Net Income Equity

Required:
a. Explain why U.S. GAAP adjustment (a) results in an addition to net income. Explain why U.S. GAAP adjustment (a) results in an addition to shareholders' equity that is greater than the addition to net income. What is the shareholders' equity account affected by adjustment (a)?
b. Explain why U.S. GAAP adjustment (b) reduces net income. Explain why U.S. GAAP adjustment (b) reduces shareholders' equity by a larger amount than it reduces net income. What is the shareholders' equity account affected by adjustment (b)?

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938,655 4,057,772 As stated under IFRS. U.S. GAAP adjustment:s (a)Reversal of amortization charge on 16,965 (b)Gain on sale and leaseback of building(40,733 (66,967) 903,577 4,007,770 deferred development costs 5,655 As stated under U.S. GAAP