Question
Company XYZ is an SEC filer that has a fiscal year-end of December 31. XYZs Indian subsidiary (XYZ India) has historically closed its books on
Company XYZ is an SEC filer that has a fiscal year-end of December 31. XYZs Indian subsidiary (XYZ India) has historically closed its books on a one month lag (i.e., as of November 30) in order to meet the parent companys reporting deadline. The Company has consistently disclosed this information in the footnotes to its Form 10-K. During the second quarter of 20X9, XYZ India upgraded its systems and is able to complete its close process within a shorter period of time. Management is seeking to eliminate the one month lag because it is no longer needed to achieve timely consolidation. 1. Is this change allowed? If so, is it a Change in accounting principle Change in accounting estimate Correction of an error in previously issued financial statements, or Change in reporting entity 2. In what Period should this be recognized (retrospective, current and/or prospective) 3. Is financial statement disclosure required?
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