If the investor holds enough common shares to control the investee (more than 50% common share ownership),then the two corporations are no longer separate accounting entities and therefore may no longer maintain separate accounting records.

Question

Quizplus · Accepted Answer

Even if an investor holds enough common shares to control the investee, both corporations can still maintain separate accounting records. The consolidation for reporting purposes does not eliminate the requirement for each entity to keep its own records.

If the Investor Holds Enough Common Shares to Control the Investee