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Unformatted text preview: Q7-7
When an investing company has gained ownership over more than 50% of the
outstanding voting stock of the investee company, it is said that the investing company has
control and is a parent company to the investee. In these cases GAAP requires consolidation of
financial statements issued to the public (Easton, Halsey, McAnally, Hartgraves, & Morse,
2010). One of the main purposes of consolidated financial statements is to provide for a more
efficient analysis. Instead of examining individual statements for all the subsidiary companies,
stockholders can determine the financial health of the network of companies from examining a
single financial statement (http://www.ehow.com/info_12018876_reasons-consolidatedfinancial-statements.html). ...
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- Spring '09