According to SFAS 154, which of the following statements is correct regarding accounting changes that result in financial statements that are, in effect, the statements of a different reporting entity?
- Cumulative-effect adjustments should be reported as separate items on the financial statements pertaining to the year of change.
- No restatements or adjustments are required if the changes involve consolidated methods of accounting for subsidiaries.
- No restatements or adjustments are required if the changes involve the cost or equity methods of accounting for investments.
- The financial statements of all prior periods presented are adjusted retrospectively.