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4 Cards in this Set
- Front
- Back
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Control |
Consolidated Financials are prepared when the parent-subsidiary relationship is formed. An investor becomes a "parent" when control over an investee is established or >50% of the voting stock is acquired. |
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Unconsolidated financials >50% |
Under GAAP, majority owned subsidiaries must be consolidated unless significant doubt exists regarding the parent's ability to control the sub, for example: subsidiary is in legal reorganization, or bankruptcy and/or subsidiary operates under severe foreign restrictions |
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Recognition principle |
Consolidate subsidiary at 100%... recognize all of the assets and liabilities including intangibles (meaning don't just consolidate the 70/80/90% owned) |
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Measurement Principle |
Measure each recognized asset, liability, and noncontrolling interest at its acquisition date FV |
