Majority-owned subsidiaries should be excluded from the consolidated statements when:
A) control does not rest with the majority owner.
B) the subsidiary operates under governmentally imposed uncertainty.
C) a foreign subsidiary is domiciled in a country with foreign exchange restrictions or controls.
D) any of these circumstances exist.

Question

Quizplus · Accepted Answer

Majority-owned subsidiaries are typically included in consolidated financial statements. However, they may be excluded under certain circumstances such as when control does not rest with the majority owner, when there's governmentally imposed uncertainty affecting the subsidiary's operations, or when a foreign subsidiary is in a country with foreign exchange restrictions or controls. These conditions can impair the parent company's ability to control the subsidiary, thus justifying exclusion from consolidated statements.

Majority-Owned Subsidiaries Should Be Excluded from the Consolidated Statements When