Which of the following is a change inreporting entity? 1) A change to the fullco

Question

Which of the following is a change inreporting entity? 1) A change to the fullcost method in the extractive industries. 2) Switching to thecompleted contract method. 3) A change from thecost to the equity method. 4) Consolidating asubsidiary not previously included in consolidated financialstatements Which of the following is a change inreporting entity? Which of the following is a change inreporting entity? A change to the fullcost method in the extractive industries. Switching to thecompleted contract method. A change from thecost to the equity method. Consolidating asubsidiary not previously included in consolidated financialstatements 1) A change to the fullcost method in the extractive industries. 2) Switching to thecompleted contract method. 3) A change from thecost to the equity method. 4) Consolidating asubsidiary not previously included in consolidated financialstatements

Explanation / Answer

4) Consolidating a subsidiary not previously included inconsolidated financial statements is a Change in reportingentity.

Change in reporting entity is a term used when two ormore companies are combined into one. Typically , the financialstatement for the five years preceding the change are restated topresent income before extraordinary items, net income and Earningsper Share as if both these were combined during that period.Therestatement is typically for a period of fiveyears.

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