Video: Changes in Reporting Entity

In this lesson, Nick Palazzolo, CPA, breaks down the reporting procedures for when a company undergoes a change in its reporting entity. He unfolds the concept by explaining the retrospective method of adjusting the financial statements for all previous periods presented, contrasting it with the prospective approach used for estimates. Nick further clarifies the scenarios where such retrospective revisions are necessary, such as mergers or alterations in the subsidiaries counted in consolidated or combined financial statements. Delving deeper, he discusses changes in the accounting methods for subsidiaries or investments, like shifting from the fair value to the equity method, promising more details in the upcoming lessons on consolidation.