A parent company that owns 90% of the shares of a subsidiary must present its interest in the subsidiary using which of the following?

Question

Quizplus · Accepted Answer

A parent company that owns 90% or more of a subsidiary is required to use full consolidation with a non-controlling interest of 10% in the consolidated statements. This involves combining all assets, liabilities, and equity accounts of the subsidiary with those of the parent company, and reporting the non-controlling interest separately as a component of equity. The other options, such as the equity method or partial consolidation, are not appropriate for majority-owned subsidiaries as they do not provide a comprehensive picture of the parent's control over the subsidiary.

A Parent Company That Owns 90% of the Shares of a Subsidiary