medium · Financial Accounting accounting-cycle-financial-statements

When a parent company consolidates a 70%-owned subsidiary, how are the subsidiary's revenues and the 30% non-controlling interest (NCI) handled in the consolidated financial statements?

1. The parent adds its own 70% revenue share to income; the 30% NCI share is ignored entirely.
2. Only 70% of the subsidiary's total revenues are proportionally included in the consolidated total.
3. 100% of the subsidiary's revenues are included; NCI is shown as a separate component of equity.
4. 100% of revenues are included; NCI is shown instead as a current liability owed to outside shareholders.

Sign up free to see the explanation and track your rank →