Consolidated financial statements are appropriate when an investor controls an investee by ownership of more than 50% of the investee's ordinary shares.

Question

Quizplus · Accepted Answer

This statement is true as per the accounting principles. When an investor holds more than 50% of the ordinary shares of an investee, they have control over the investee and must prepare consolidated financial statements that include the investee's financial information in the investor's financial statements.

Consolidated Financial Statements Are Appropriate When an Investor Controls an Investee