_____ A valid reason for not consolidating a subsidiary is
A) The subsidiary is an insurance subsidiary of a manufacturing company parent.
B) The parent does not take an active role in the management of the subsidiary's operations.
C) The subsidiary is entering the third month of a prolonged and bitter strike by its union employees.
D) The subsidiary is located in a foreign country.
E) None of the above.

Question

Quizplus · Accepted Answer

The reasons provided in options A, B, C, and D are not valid reasons for not consolidating a subsidiary according to accounting standards. Consolidation is generally required when the parent company has control over the subsidiary, regardless of these circumstances.

_____ a Valid Reason for Not Consolidating a Subsidiary Is