There are three main concepts of consolidation - proprietary, entity and parent entity. The choice of concept affects how consolidated financial statements are prepared:
A)Only where the subsidiary is less than wholly owned by the parent.
B)Only where the subsidiary is wholly owned by the parent.
C)Always.
D)Only where the subsidiary is profitable.

Question

Quizplus · Accepted Answer

The choice of consolidation concept affects the preparation of consolidated financial statements primarily when the subsidiary is less than wholly owned by the parent, as it determines how non-controlling interests are treated.

There Are Three Main Concepts of Consolidation - Proprietary, Entity