If a reporting entity establishes a foreign operation, the equity used to form the foreign operation is the:
A) pre-acquisition equity.
B) foreign equity.
C) reporting equity.
D) post-acquisition equity.

Question

Quizplus · Accepted Answer

When a reporting entity establishes a foreign operation, the equity used to form the foreign operation is considered pre-acquisition equity. This is because the entity did not acquire an existing company or its equity; it simply established a new entity in a foreign country.

If a Reporting Entity Establishes a Foreign Operation, the Equity