It is inappropriate to consolidate a subsidiary that has not yet become profitable.

Name: It is inappropriate to consolidate a subsidiary that has not yet become profitable.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Consolidation is based on control, not profitability. If a parent company has control over a subsidiary (typically through owning more than 50% of the subsidiary's voting stock), it must consolidate the subsidiary's financial statements with its own, regardless of the subsidiary's profitability.

It Is Inappropriate to Consolidate a Subsidiary That Has Not