The Non-Consolidated Finance Company Subsidiary.

Abstract ABSTRACT: The Financial Reporting section includes two articles on the same subject: the practice of not consolidating controlled finance subsidiaries. Benis examines the implications of this widespread practice on balance sheets and on the resulting analysis of those balance sheets. Burnett, King and Lembke analyze the wide variation in parent company practices related to the recognition of the income of finance subsidiaries and the impact of such variation on analysis of income statements. Both articles appear particularly relevant in view of recently announced projects to reconsider the propriety of non-consolidation of finance subsidiaries.