When an investor company gains control of a subsidiary company, which of the fol
ID: 2483163 • Letter: W
Question
When an investor company gains control of a subsidiary company, which of the following is correct?
i. The investor company must consolidate the financial statements of the investor company, subsidiary company, and the non-controlling interest company.
ii. The investor company must include in the consolidation, the income and equity attributable to the Non-controlling interest.
iii. The investor company consolidates its own financial statements and the financial statements of all the subsidiary companies that it controls.
Select one:
a. i. only
b. ii. only
c. i and ii
d. ii and iii
e. The type or class of customer.
Explanation / Answer
When an investor company gains control of a subsidiary company,
The investor company must include in the consolidation, the income and equity attributable to the Non-controlling interest.
The investor company consolidates its own financial statements and the financial statements of all the subsidiary companies that it controls.
Thus, the answer is ii and iii.