Under ASC 805,consolidation follows largely which theory approach?
A) Proprietary
B) Parent company
C) Entity
D) Variable

Question

Quizplus · Accepted Answer

ASC 805 primarily follows the entity theory of consolidation, which considers the consolidated entities as a single economic unit. This approach emphasizes the financial position and performance of the consolidated group as a whole, rather than the individual financial statements of each entity. The other approaches mentioned (proprietary, parent company, and variable) are not as relevant in the context of ASC 805.

Under ASC 805,consolidation Follows Largely Which Theory Approach