Term
| combined financial statements |
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Definition
| financial statements that include a group of related companies without including the parent company or other owner |
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Term
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Definition
| equal to the parent's income from its own operations, excluding any investment income from consolidated subsidiaries, plus the net income from each of the consolidated subsidiaries. |
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Term
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Definition
| one company owns the majority of another company's common stock |
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Term
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Definition
| the ability to direct the policies of another entity even though majority ownership is lacking |
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Term
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Definition
| a consolidation theory that focuses on the firm as a separate economic entity rather than on the ownership rights of the shareholders |
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Term
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Definition
| also known as pyramiding, occurs when a company's common stock is owned by one or more other companies that are all under common control |
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Term
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Definition
| the claim of "noncontrolling" or "minority" shareholders on the income and net assets of the subsidiary, AKA noncontrolling interest |
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Term
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Definition
| the claim of "noncontrolling" or "minority" shareholders on the income and net assets of the subsidiary, AKA minority interest |
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Term
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Definition
| a consolidation theory that recognizes that the parent has the ability to effectively control all of the assets and liabilities of a majority-owned subsidiary, not just a proportionate share, even though the parent does not actually own the subsidiary's assets or have any obligation for its liabilities. |
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Term
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Definition
| an entity that will absorb a majority of the VIE's expected losses, receive a majority of the VIE's expected residual returns, or both |
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Term
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Definition
| a consolidation theory in which the firm's assets, liabilities, revenues, and expenses are viewed as those of the owners themselves |
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Term
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Definition
| the parent company consolidates only its proportionate share of a less-than-wholly-owned subsidiary's assets, liabilities, revenues, and expenses |
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Term
| special-purpose entities (SPEs) |
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Definition
| corporations, trusts or partnerships created for a single specified purpose; usually have no substantive operations and are used only for financing purposes |
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Term
| variable interest entity (VIE) |
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Definition
| a legal structure used for business purposes, usually a corporation, trust or partnership, that either (1) does not have equity investors that have voting rights and share in all of the entity's profits and losses or (2) has equity investors that do not provide sufficient financial resources to support the entity's activities |
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