Asked by
Peyton Delany
on Oct 14, 2024
Verified
If a parent loses control of a subsidiary during a financial year,that subsidiary's results are ignored for consolidation purposes.
Subsidiary
A company that is controlled by another company, known as the parent company, through ownership of a majority of its voting stock.
Consolidation Purposes
The process of combining and presenting the financial statements of a parent company and its subsidiaries as one single entity's financial statements.
- Acknowledge the correlation between the exertion of control and the obligation to produce consolidated financial accounts, including understanding the ramifications of losing control over a subsidiary.
Verified Answer
JM
Learning Objectives
- Acknowledge the correlation between the exertion of control and the obligation to produce consolidated financial accounts, including understanding the ramifications of losing control over a subsidiary.