Consolidated financial statements are prepared when one company has:

Question

Quizplus · Accepted Answer

Consolidated financial statements are prepared when one company has control over another company. This means that the controlling company has the power to direct the activities of the other company and obtain benefits from its activities. In such cases, the subsidiary company's financial statements are combined with those of the controlling company to present a single set of financial statements. Options A and B relate to accounting treatments for investments by the company, but do not necessarily require the preparation of consolidated financial statements. Option D is incorrect as one of the requirements for consolidated financial statements is control over another company.

Consolidated Financial Statements Are Prepared When One Company Has