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When is a company not required to consolidate a subsidiary in which it holds more than...

When is a company not required to consolidate a subsidiary in which it holds more than 50% of the voting stock? A. When the subsidiary is in bankruptcy. B. When the subsidiary is a finance company. C. When the subsidiary is located in a foreign country. D. When the subsidiary is not included in the consolidated tax return.

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Answer #1

The parent company shall required to be consolidated the financial statement of its subsidiary in which it holds more than 50% ( controlling interest ) of the voting stock. However, the reporting standard gives some exceptions from preparing consolidated financial statement. According to the above exceptions, When the subsidiary is in bankruptcy then the parent company is need not be prepare the consolidated financial statement.

A. When the subsidiary is in bankruptcy.

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