Consolidation adjustments that are made to prepare consolidated financial statements of the parent and subsidiary are required in order to

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Consolidation adjustments are made to avoid double counting of transactions between the parent and subsidiary, which could result in overstated financial results. These adjustments are necessary to ensure that consolidated financial statements reflect the financial position and performance of the group as a whole. While adherence to state laws, tax laws, and elimination of transactions with third parties may also be factors in preparing consolidated financial statements, the primary purpose of consolidation adjustments is to avoid double counting.

Consolidation Adjustments That Are Made to Prepare Consolidated Financial Statements