FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

When an investor controls an investee, consolidation is required. The parent investor must prepare consolidated statements, to enable investors (and others) to see the assets, liabili- ties, revenues, and expenses of the entire economic entity, consisting of the parent and all of its subsidiaries. When consolidated statements are prepared, the investment account relating to a con- trolled subsidiary disappears entirely from the balance sheet. Instead, the subsidiary’s assets and liabilities are added to those of the parent and reported together as a single economic entity. If the parent owns less than 100% of the subsidiary’s shares, the interest of the non- controlling (i.e.,minority) shareholders is shown as a...