Module 9C

Question 1

Change in Reporting Entity

Answer 1

a) Leaving out a subsidiary when it is being controlled by bankruptcy court but including it once it emerges
b) Leaving out a foreign subsidiary when it is being controlled by a foreign government but including it when there’s a change in foreign government’s policy

Question 2

Steps in dealing with changes in reporting entity

Answer 2

1. Use the new reporting entity in the current accounting period
2. Apply the new reporting entity retrospectively to the financial statements of all prior periods presented