Under what circumstances does a company prepare consolidated financial statements? Solution Consolidated Financial Statement Consolidated financial statements are the combined financial statements of the parent company and its subsidiary companies. Purpose of consolidated financial statements (CFS) is to present the financial position of parent and its all subsidiaries as a single business entity. Purpose of presentation of CFS is to provide the more meaningful information to stockholders and creditors than separate presentation by parent and each subsidiary. In these circumstances consolidation of financial statements required. However a majority -owned .

1. Under what circumstances does a company prepare consolidated financial statements?
Solution
Consolidated Financial Statement
Consolidated financial statements are the combined financial statements of the parent company
and its subsidiary companies.
Purpose of consolidated financial statements (CFS) is to present the financial position of parent
and its all subsidiaries as a single business entity. Purpose of presentation of CFS is to provide
the more meaningful information to stockholders and creditors than separate presentation by
parent and each subsidiary.
In these circumstances consolidation of financial statements required.
However a majority -owned