Consolidated financial statements are typically prepared when one company has

Question

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Consolidated financial statements are prepared when one company has the controlling financial interest in another company. This means that the controlling company has the power to direct the operating and financial policies of the subsidiary, and it consolidates the financial results of the subsidiary with its own financial results to present a complete picture of the group's financial position and performance. The equity method (A) is used when the investor has significant influence but not control over the investee. Substantial equity interest (D) may indicate significant influence, but it does not necessarily imply control.

Consolidated Financial Statements Are Typically Prepared When One Company Has