Advanced Accounting
Advanced Accounting
7th Edition
ISBN: 9781119373209
Author: JETER, Paul K. Chaney
Publisher: WILEY
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Chapter 4, Problem 1Q
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Describe the way in which the nonconsolidated subsidiaries have to be reported in the consolidated financial statements.

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Explanation of Solution

Generally, most of the subsidiaries are consolidated and reported in a parent company’s financial statement. Thus, it is expected to be rare to find nonconsolidated subsidiaries. If a parent company does not consolidate its subsidiary financial statements, then the cost of investment made in the subsidiary has to be reported in the “consolidated statement of financial position” along with other long-term investment.

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