Question

TUI AG issued the following subsequent event footnote in its 2006 annual report.
Its auditors, PricewaterhouseCoopers, signed the report on March 5, 2007.
The integration of CP Ships into Hapag-Lloyd changed the primary economic environment of the companies operating in the shipping division to such an extent that the functional currency was changed from the euro to the U.S. dollar. The assessment of the functional currency was based on freight rates, cash inflow, and cost structures. As of January 1, 2007, the companies operating in the container shipping division will therefore prepare their financial statements in U.S. dollars.
a. What type of subsequent event is reported in this footnote? Explain your answer.
b. Why would outsiders be interested in the information provided by the footnote disclosure?



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  • CreatedJanuary 22, 2015
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