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Business
AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

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Chapter 22, Problem 8MC
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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 18GI
Problem 19GI
Problem 20GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 8MC
Problem 9MC
Problem 10MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 10RE
Problem 11RE
Problem 12RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 12P
Problem 13P
Problem 14P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
Problem 7C
Problem 8C
Problem 9C
Problem 10C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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A company has included in its consolidated financial statements this year a subsidiary acquired several years ago that was appropriately excluded from consolidation last year. This results in:

  1. a. an accounting change that should be reported prospectively
  2. b. an accounting change that should be reported by retrospectively restating the financial statements of all prior periods presented
  3. c. neither an accounting change nor a correction of an error
  4. d. a correction of an error

To determine

Find the correct option, the option that indicates the correct method of reporting the given type of accounting change.

Explanation

Accounting changes: When a company requires to sacrifice the consistent accounting methods and procedures, to enhance the usefulness and relevance of the accounting information, those changes are referred to as accounting changes. Such inevitable accounting changes decrease the comparability and consistency of accounting information. The reasons for accounting changes could be new methods introduced by FASB (Financial Accounting Standards Board), changes in accounting principles, and changes in accounting estimates. The following are the three types of accounting changes:

  • Change in an accounting principle
  • Change in an accounting estimate
  • Change in a reporting entity

Methods of reporting accounting changes:

  • Retrospective adjustment method: This method requires that the previously reported financial statements should be revised to reflect the current accounting change. The change in a reporting entity and change in accounting principle are accounted for retrospectively.
  • Prospective method: This method requires that the current financial statements should be accounted for the changes, and the previously reported financial statements need not be revised...

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Chapter 22 Solutions

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Ch-22 P-1GICh-22 P-2GICh-22 P-3GICh-22 P-4GICh-22 P-5GICh-22 P-6GICh-22 P-7GICh-22 P-8GICh-22 P-9GICh-22 P-10GI
Ch-22 P-11GICh-22 P-12GICh-22 P-13GICh-22 P-14GICh-22 P-15GICh-22 P-16GICh-22 P-17GICh-22 P-18GICh-22 P-19GICh-22 P-20GICh-22 P-1MCCh-22 P-2MCCh-22 P-3MCCh-22 P-4MCCh-22 P-5MCCh-22 P-6MCCh-22 P-7MCCh-22 P-8MCCh-22 P-9MCCh-22 P-10MCCh-22 P-1RECh-22 P-2RECh-22 P-3RECh-22 P-4RECh-22 P-5RECh-22 P-6RECh-22 P-7RECh-22 P-8RECh-22 P-9RECh-22 P-10RECh-22 P-11RECh-22 P-12RECh-22 P-1ECh-22 P-2ECh-22 P-3ECh-22 P-4ECh-22 P-5ECh-22 P-6ECh-22 P-7ECh-22 P-8ECh-22 P-9ECh-22 P-10ECh-22 P-11ECh-22 P-12ECh-22 P-13ECh-22 P-14ECh-22 P-15ECh-22 P-16ECh-22 P-1PCh-22 P-2PCh-22 P-3PCh-22 P-4PCh-22 P-5PCh-22 P-6PCh-22 P-7PCh-22 P-8PCh-22 P-9PCh-22 P-10PCh-22 P-11PCh-22 P-12PCh-22 P-13PCh-22 P-14PCh-22 P-1CCh-22 P-2CCh-22 P-3CCh-22 P-4CCh-22 P-5CCh-22 P-6CCh-22 P-7CCh-22 P-8CCh-22 P-9CCh-22 P-10C

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