When a firm has a change in reporting entity, it must disclose ________.
A) the individual financial statements for each component entity
B) the effect of the change on net income and EPS for each year presented
C) the reasons that the company chose to purchase a new business unit
D) the reasons for the lack of comparability to prior financial statements

Question

Quizplus · Accepted Answer

When a firm changes its reporting entity, it must disclose the effect of the change on net income and EPS for each year presented to ensure transparency and comparability for users of the financial statements.

When a Firm Has a Change in Reporting Entity, It