You are a manger in the accounting department of Greene Company. Greene is a rapidly expanding manufacturing company, and is considering some additional acquisitions. The company would like to diversify, and is trying to decide between the two different scenarios outlined in Part 1. To help him make his decision, the Chief Financial Officer would like specific information on how the potential acquisitions would affect financial reporting. This project is split into four (4) parts with one (1) part due each week of the course. Based on your readings, use of technology, research of literature, and other sources do the following:

1. Greene is considering diversifying by purchasing an insurance company and a lumber company. The CFO would like to know how the accounts of these two substantially different subsidiaries would be reported in the consolidated financial statements. Research the Accounting Standards Codification to see what guidance is provided, and prepare a 2 page memo to the CFO with your findings. Include in your memo at least two examples of situations in which it may be inappropriate to combine similar-appearing accounts of two subsidiaries.