Which of the following is not a change in reporting entity?
A) A company acquires a subsidiary that is to be accounted for as a purchase.
B) A company presents consolidated or combined statements in place of statements of individual companies.
C) A company changes the companies included in combined financial statements.
D) A company changes the subsidiaries for which consolidated statements are presented.

Question

Quizplus · Accepted Answer

Acquiring a subsidiary that is to be accounted for as a purchase is a change in accounting principle, not a change in reporting entity. Changes in reporting entity involve changes in the companies or subsidiaries included in financial statements or changes in the type of financial statements presented.

Which of the Following Is Not a Change in Reporting