$9\mathrm{.}7$ Strategic Investments$$Investments in Subsidiaries

Why do parent companies disregard the legal boundaries of entities, and report consolidated financial statements as a single economic entity?

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to prevent duplication of effort

so the equity claims of noncontrolling shareholders to net assets and net income are transparent

to eliminate cumbersome analysis when reporting minority interests

to provide useful information to financial statement users about all the resources under the control of parent company management

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