explain factors that must be considered in determining whether a corporation has control of another entity for the purpo...

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explain factors that must be considered in determining whether a corporation has control of another entity for the purpo...

explain factors that must be considered in determining whether a corporation has control of another entity for the purpose of determining whether consolidated financial statements should be prepared.

business accounting

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Answer 1

Answer #1

The following circumstances are where in the company prepares consolidated financial statements :

1.When the company has majority control over the ownership of the shares.

2. When if the company has substantial voting rights such that it is able to influence to the decision making process.

The above are as per the guidelines of US GAAP which primarily prescribes two methods, variable interest method and voting method.

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Answer 2

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explain factors that must be considered in determining whether a corporation has control of another entity for the purpo...

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