_____ A valid reason for not consolidating a subsidiary is
A) The subsidiary is a finance subsidiary of a manufacturing parent.
B) The parent has a "hands off" decentralized operating philosophy and therefore does not take an active role in the day-to-day management of the subsidiary's operations.
C) The subsidiary never declares dividends.
D) The subsidiary is effectively managed by a foreign government.
E) None of the above.

Question

Quizplus · Accepted Answer

A subsidiary being effectively managed by a foreign government can be a valid reason for not consolidating it, as the parent company may not have control over its operations, which is a key criterion for consolidation.

_____ a Valid Reason for Not Consolidating a Subsidiary Is