Poepdates - Consolidated vs consolidating
GAAP dictates when and how companies should consolidate and whether certain entities need to be consolidated.
Thus, it is important to note that entities in which a company owns only a minority interest do not often need to be consolidated.
The court may also try one representative case and render a judgment binding on the other cases.
If you control the other company, you have to draw up consolidated financial statements.
These add the subsidiary's income, expenses and assets to your own.
If your business invests in another business, keeping the books becomes even more complicated.
If, say, you buy one of your suppliers, do you still report buying supplies as an expense?
If you buy more than 20 percent, accounting rules treat you as a serious player – someone who can exert a lot of influence over the other business.