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 to be accounted for as a purchase is not a change in reporting entity. It would affect the consolidation of financial statements, but the reporting entity remains the same. B, C, and D are all changes in reporting entity because they involve a change in the scope of the financial statements and the companies included in them.

Which of the Following Is NOT a Change in Reporting