Question

Which of the following is not a change in reporting entity? Group of answer choices Reporting using comparative financial statements for the first time. Changing the companies that comprise a consolidated group. Presenting consolidated financial statements for the first time. All are changes in reporting entity.

Answer 1

Answer:

Reporting using comparative financial statements for the first time

Explanation:

Change in reporting entity is when previously distinct entities come together and jointly present a report. It also occurs when there is a new combination of entities, due to one leaving, a new entity joining or an entity being replaced by another.

When the companies that comprise a consolidated group are changed, this is a change in reporting entity. The same is true of presenting consolidated financial statements for the first time. Consolidated financial statements present financial information of a parent company and its subsidiaries as an entity.

However, comparative financial statements are not a change of reporting entity, they are simply financial reports that present the financial information of more than one period.