If consolidated statements are presented for the first time instead of statements of several individual companies, this change should be accounted for
A)retrospectively
B)prospectively
C)by cumulative effect adjustment
D)by footnote disclosure only

Question

Quizplus · Accepted Answer

When there is a change in presentation from separate company statements to consolidated statements, the change should be accounted for retrospectively. This means that the consolidated financial statements should be presented as if they had always been prepared in this way, and prior period financial statements should be restated accordingly. This provides users with comparable financial information for all periods presented.

If Consolidated Statements Are Presented for the First Time Instead