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Unconsolidated Subsidiary

What is an 'Unconsolidated Subsidiary'

An unconsolidated subsidiary is a company that is owned by a parent company, but whose individual financial statements are not included in the consolidated or combined financial statements of the parent company to which it belongs. Instead, this type of company appears in the combined financial statement as an investment.

Explaining 'Unconsolidated Subsidiary'

A company may be treated as unconsolidated even when a parent company owns 50% or more of its voting common stock. This usually occurs when the parent is not in actual control of subsidiary, has temporary control of the subsidiary or if the parent company's business operations are considerably different than that of the subsidiary.


Further Reading


Incentives for unconsolidated financial reporting
www.sciencedirect.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Unconsolidated Finance Subsidiaries: Characteristics And DeUnconsolidated Finance Subsidiaries: Characteristics And De
search.proquest.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Debt capacity and financial contracting: Finance subsidiariesDebt capacity and financial contracting: Finance subsidiaries
books.google.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Consolidation of Finance Subsidiaries: $230 Billion inConsolidation of Finance Subsidiaries: $230 Billion in
search.proquest.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Management of note disclosures: The case of unconsolidated subsidiaries prior to FAS No. 94Management of note disclosures: The case of unconsolidated subsidiaries prior to FAS No. 94
journals.sagepub.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

An evaluation of the value relevance of consolidated versus unconsolidated accounting information: evidence from quoted Spanish firmsAn evaluation of the value relevance of consolidated versus unconsolidated accounting information: evidence from quoted Spanish firms
onlinelibrary.wiley.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Restating financial statements for alternative GAAPs: Is it worth the effort?Restating financial statements for alternative GAAPs: Is it worth the effort?
www.tandfonline.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Equity method reporting for major finance company subsidiariesEquity method reporting for major finance company subsidiaries
www.jstor.org [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Incentives for consolidation of finance subsidiaries: evidence from FranceIncentives for consolidation of finance subsidiaries: evidence from France
www.inderscienceonline.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …

Illustrating the economic consequences of FASB Statement No. 94, Consolidation of All Majority-Owned SubsidiariesIllustrating the economic consequences of FASB Statement No. 94, Consolidation of All Majority-Owned Subsidiaries
www.sciencedirect.com [PDF]
… Consolidated subsidiaries engage in i&a-firm fi- nancing and sales financing, and the subsidiary's debt is guaranteed by the parent … Unconsolidated finan- cial services subsidiary operates in a business and economic environment which differs drastically from that of its …



Q&A About Unconsolidated Subsidiary


How many voting common stock shares must a parent own for their subsidiary to be considered unconsolidated?

The parent must own 5 or more voting common stock shares.

What does this type of company appear in the combined financial statement as?

This type of company appears in the combined financial statement as an investment.

What is an unconsolidated subsidiary?

An unconsolidated subsidiary is a company that is owned by a parent company, but whose individual financial statements are not included in the consolidated or combined financial statements of the parent company to which it belongs.