Consolidated financial statements are typically prepared when one company has

Question

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Consolidated financial statements are prepared when one company, known as the parent company, has a controlling financial interest in another company, known as the subsidiary. This means that the parent company has the power to direct the financial and operating policies of the subsidiary and to benefit from its activities. Consolidated financial statements combine the financial information of both the parent and subsidiary companies into a single set of statements, reflecting the economic reality of their relationship.

Consolidated Financial Statements Are Typically Prepared When One Company Has