But in reality, the parent company controls the subsidiary, so it no longer operates completely independently.
Because the parent company now fully controls the subsidiary, by accounting rules, the parent company must present its subsidiary's and its own financial operations in a consolidated manner (even though the two companies may be separate legal entities).
The parent company does so by publishing a consolidated financial statement, which combines the assets, liabilities, revenue, and expenses of the parent company as well as those of its affiliates (that is, its subsidiaries, associates, and joint ventures).
If you hold a minority interest in the subsidiary of a parent company, the consolidated financial statement won't give you the information you need to make decisions about your holdings.
A subsidiary with minority shareholders must report its financial results separately from its parent company's in addition to having its report included in the consolidated financial statements.
When a company owns all the common stock of its subsidiaries, the company doesn't really need to publish reports about its subsidiaries' individual results for the general public to peruse.
Shareholders don't even need to know the results of these subsidiaries.
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Most major corporations comprise numerous companies bought along the way to create their empires.
The financial statement reflects the financial results for all the entities it bought as well as the original assets of the company.
After a stock acquisition by the parent company, the subsidiary continues to maintain separate accounting records.