When an investor owns more than 50% of the common shares of another company,
A)consolidated financial statements are usually prepared.
B)the fair value through profit or loss model is used.
C)the investor is called a subsidiary.
D)the investor recognizes income only when dividends are received.

Question

Quizplus · Accepted Answer

When an investor owns more than 50% of the common shares of another company, it typically results in the investor having control over that company. This control necessitates the preparation of consolidated financial statements to reflect the financial position and operations of both the investor and the investee as a single economic entity.

When an Investor Owns More Than 50% of the Common