Discuss the Conditions Under Which the SEC Would Assume a Presumption

question 11

Essay

Discuss the conditions under which the SEC would assume a presumption of control.Additionally, under what circumstances might consolidation be required even though the parent does not control the subsidiary?
When would it not be appropriate to consolidate when more than 50% of the voting stock is held?

---

Definitions:

Statement of Cost

A financial report that details the costs associated with producing goods, often used in manufacturing to assess production expenses.

Raw Material Inventory

Items and inventory that are used in the manufacturing process to create products but have not yet been converted into finished goods.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits.

Expenses

The costs incurred in the process of generating revenues, including costs of goods sold, operating expenses, and taxes.