Consolidating entries mandating vaccines in schools
A guide to accounting for users who are interested in understanding accounting reports.This section explains what users need to know to understand and analyze accounting information provided in the financial statements. Cam Merritt is a writer and editor specializing in business, personal finance and home design.He has contributed to USA Today, The Des Moines Register and Better Homes and Gardens"publications.
The parent prepares consolidated financial statements by making adjusting entries and eliminating intercompany transactions.In general, a controlling stake is one that involves ownership of more than 50 percent of a business.When a company owns a stake that is less than controlling but still allows it to exert significant influence over the business, it must use the equity method of accounting.The parent files a combined tax return when it owns at least 80 percent of the subsidiary’s voting shares.The parent company combines the group’s assets, liabilities and equity on the consolidated balance sheet, and 100 percent of the subsidiary's assets and liabilities are included, even if the parent owns less than 100 percent of the voting shares.
Accounting rules generally define a controlling stake as between 20 percent and 50 percent of a company.