With an investment in a subsidiary the financial statements of the investee are consolidated with those of the investor.

Question

Quizplus · Accepted Answer

When an investor holds a significant percentage of ownership in a subsidiary, usually more than 50%, the financial statements of the subsidiary are consolidated with those of the investor. This means that the parent company (investor) reports the financial performance of the subsidiary in its own financial statements.

With an Investment in a Subsidiary the Financial Statements of the Investee