Consolidated net income may include the parent's separate operating income plus the parent's share of the subsidiary's reported net income:

Question

Quizplus · Accepted Answer

In consolidated financial statements, unrealized profits from intercompany transactions must be eliminated to avoid overstating revenues and profits. Therefore, the profit realized in the current year from upstream intercompany sales of inventory made in the previous year is included in the consolidated net income, as it is no longer unrealized.

Consolidated Net Income May Include the Parent's Separate Operating Income