When a subsidiary's restricted net assets are more than 25% of consolidated net assets, the Securities and Exchange Commission does not allow that subsidiary to be consolidated.

Question

Quizplus · Accepted Answer

The Securities and Exchange Commission (SEC) does not have a specific rule that prohibits the consolidation of a subsidiary when its restricted net assets exceed 25% of the consolidated net assets. Consolidation decisions are generally based on control and ownership criteria, not the proportion of restricted net assets.

When a Subsidiary's Restricted Net Assets Are More Than 25