Definition for : Consolidation methods

There are three consolidation methods, which are used depending on the strength of the Parent company's control or influence (see also Significant influence): Full consolidation, Proportionate consolidation, and the Equity method. The basic principle consists in replacing the historical Cost of the parent's Investment in the company being consolidated with its Assets, Liabilities and equity.

(See Chapter 6 Getting to grips with consolidated accounts of the Vernimmen)

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