An 80% owned subsidiary is not consolidated because control has been lost. The cost method cannot be used to account for the investment in the subsidiary if the parent has significant influence.

Question

Quizplus · Accepted Answer

Even if control is lost, if the parent has significant influence over the subsidiary, the equity method, not the cost method, is typically used to account for the investment in the subsidiary.

An 80% Owned Subsidiary Is Not Consolidated Because Control Has