One of the major changes in both corporations legislation and accounting standards is the adoption of the
Question:
‘One of the major changes in both corporations legislation and accounting standards is the adoption of the reporting entity concept.’
This comment was made in a presentation at an accounting conference. One of the directors of your entity, a Brisbane-based company that is a wholly owned subsidiary of a Sydney-based company, was at the presentation and was concerned at his lack of knowledge of this concept.
Explain to the director what is meant by the ‘reporting entity’ concept, the steps the company needs to take to determine whether it is a reporting entity, and the potential impact of this concept on financial reporting. Discuss as well whether or not the reporting entity concept should be abandoned.
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett