What is Change in reporting entity?
In short
A change in reporting entity occurs when financial statements present a different entity than before, such as presenting consolidated statements in place of individual company statements or changing which subsidiaries are consolidated.
Key takeaways
- It is applied retrospectively to all periods presented.
- A business combination accounted for under the acquisition method is not a change in reporting entity.
- The nature of and reason for the change are disclosed.
Where it's tested
FAR: Accounting Changes & Error Corrections — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which situation is a change in reporting entity?