What information must be included in the pro forma financial statement?
A. The pro forma financial statement is designed to provide investors with information about the continuing impact of the transaction by showing how it might have affected historical financial statements if it had been consummated at an earlier time. In general, pro forma financial information consists of a pro forma condensed balance sheet; pro forma condensed statements of income, and accompanying explanatory notes. When only a limited number of pro forma adjustments are required, and those adjustments are easily understood, the Company may instead provide a narrative description of the pro forma effects of the transaction.
