**Case Study:** *Background:* ABC Corp, a global conglomerate with subsidiaries in multiple countries, is facing a complex financial scenario. The corporation recently underwent a strategic restructuring, involving the acquisition of a tech startup in Country X. The startup operates in a jurisdiction with unique accounting practices, and ABC Corp is now challenged with consolidating financial statements, ensuring compliance with international accounting standards, and navigating the complexities of the newly acquired entity's financial reporting. *Scenario:* The startup in Country X has been using a modified version of International Financial Reporting Standards (IFRS), incorporating certain local adjustments to comply with national regulations. Meanwhile, ABC Corp follows Generally Accepted Accounting Principles (GAAP) in its consolidated financial statements. The finance team is tasked with aligning the startup's financials with the parent company's reporting standards, considering the impact on stakeholders and ensuring accurate financial representation *Challenges:* 1. **Accounting Standard Alignment:** The finance team needs to reconcile the differences between IFRS and GAAP, ensuring a seamless consolidation of financial statements without compromising transparency and accuracy. 2. **Tax Implications** The acquisition in Country X triggers various tax considerations, including transfer pricing, cross-border transactions, and local tax regulations. The team must navigate these complexities to optimize tax efficiency while ensuring compliance. 3. **Stakeholder Communication:** Transparent communication with stakeholders, including investors, regulatory bodies, and internal management, is crucial. The finance team must provide clear explanations of accounting adjustments made during the consolidation process and the resulting impact on financial performance. *Case Study Question:* Given the intricate scenario faced by ABC Corp in consolidating financial statements and addressing tax implications after acquiring a startup with unique accounting practices in Country X: **As a financial analyst advising the corporation, how would you approach reconciling the differences between IFRS and GAAP during the consolidation process? Consider the potential impact on stakeholders and outline strategies to ensure accurate financial representation while adhering to international best practices in financial reporting.** A. Propose adjustments to align the startup's financials with GAAP, highlighting key reconciliation points. B. Recommend adopting a hybrid reporting approach that integrates elements of both IFRS and GAAP to streamline the consolidation process. C. Suggest engaging external consultants familiar with both accounting standards to facilitate a seamless transition. D. Advise disclosing the variations in accounting practices in footnotes to the financial statements, ensuring transparency while maintaining compliance with both IFRS and GAAP Please select the most appropriate option based on your analysis.