Consolidation combines the financial statements of an investor company and a joint venture enterprise based on the investor's proportionate share of the financial statements of the joint venture.

Question

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Consolidation involves combining the financial statements of a parent company and its subsidiaries, not joint ventures. Joint ventures are typically accounted for using the equity method or proportionate consolidation, depending on the accounting standards applied.

Consolidation Combines the Financial Statements of an Investor Company and a Joint