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When integral foreign operations are reclassified as non-integral, the change is treated as:
AA prior period adjustment
BA change in accounting policy — restated retrospectively
CA change in accounting estimate — applied prospectively from the date of reclassification
DAn error correction
Answer & Solution
Correct answer: C. A change in accounting estimate — applied prospectively from the date of reclassification
1. Step 1: Per AS 11, change in classification IFO ↔ NIFO is applied prospectively.
2. Step 2: It is treated as a change in estimate, not policy or error.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 15 "Accounting for Branches including Foreign Branches"_