What does reporting entity mean on the CPA exam?
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Reporting entity. The unit whose statements are being presented, including everything it controls. Drawing its boundary is the first question in consolidation and in governmental reporting.
Defined against GASB 14.
Related terms
- variable interest entity: An entity that cannot fund itself without further support, or whose equity holders lack the usual powers.
- emphasis-of-matter paragraph: A paragraph drawing attention to something already properly presented in the statements.
- full accrual: Recognizing revenue when earned and expense when incurred, and reporting every asset and liability including long-term ones.
- service organization: A third party whose processing affects a user entity's financial reporting, such as a payroll bureau or a claims processor.
- user entities: The customers of a service organization, whose own financial reporting or systems depend on the service organization's controls.
- goodwill: An asset representing the future economic benefits of acquired assets not separately identified, measured as consideration less identifiable net assets.