Under current GAAP, a banking subsidiary of a parent company that is a manufacturing company need not be consolidated.

Question

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Under current GAAP (Generally Accepted Accounting Principles), all majority-owned subsidiaries, including banking subsidiaries of a parent company that is a manufacturing company, must be consolidated in the financial statements of the parent company. This is to ensure that the financial statements present a complete and accurate picture of the financial position and performance of the entire group of companies.

Under Current GAAP, a Banking Subsidiary of a Parent Company