A subsidiary:
A) is excluded from consolidation because the investor is a venture capital organisation.
B) is not excluded from consolidation simply because the investor is a venture capital organisation.
C) is excluded from consolidation because its business activities are dissimilar from those of other entities within the group.
D) is not excluded from consolidation simply because the investor only has significant influence, and not control, over it.

Question

Quizplus · Accepted Answer

A subsidiary is not excluded from consolidation simply because the investor is a venture capital organisation. A subsidiary is defined as an entity that is controlled by another entity, known as the parent company. As long as the parent company has control over the subsidiary, either through ownership of more than 50% of the voting shares or through other means, the subsidiary should be consolidated regardless of the nature of the parent company.

A Subsidiary