Summary of Statement No. 94

Consolidation of All Majority-owned Subsidiaries—an amendment of ARB No. 51, with related amendments of APB Opinion No. 18 and ARB No. 43, Chapter 12 (Issued 10/87)


This Statement amends ARB No. 51, Consolidated Financial Statements, to require consolidation of all majority-owned subsidiaries unless control is temporary or does not rest with the majority owner. This Statement requires consolidation of a majority-owned subsidiary even if it has "nonhomogeneous" operations, a large minority interest, or a foreign location.

This Statement also makes certain related amendments to APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock, and to ARB No. 43, Chapter 12, "Foreign Operations and Foreign Exchange." Among other changes, those amendments preclude use of parent-company financial statements prepared for issuance to stockholders as the financial statements of the primary reporting entity.

This Statement requires that summarized information about the assets, liabilities, and results of operations (or separate statements) of previously unconsolidated majority-owned subsidiaries continue to be provided after those subsidiaries are consolidated.

This Statement is effective for financial statements for fiscal years ending after December 15, 1988. Restatement of comparative financial statements for earlier years is required.