A subsidiary can be excluded from consolidation when control does not rest with the majority owner.

Question

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A subsidiary can be excluded from consolidation when control does not rest with the majority owner. This may happen if the majority owner does not have control over the subsidiary's operations or if a non-controlling interest has significant influence over the subsidiary. In either case, the subsidiary's financial statements may not be consolidated with those of the parent company.

A Subsidiary Can Be Excluded from Consolidation When Control Does