Unconsolidated Subsidiary Law and Legal Definition

Unconsolidated subsidiary is a subsidiary showing individual financial statements that are not presented in the consolidated financial statement of the group to which it belongs. Usually the equity method of accounting is used for unconsolidated subsidiaries. A subsidiary is treated as not consolidated even though more than fifty percent of voting common stock is owned by the parent when:

The parent is not in actual control of subsidiary;

The parent has only temporary control of the subsidiary;

The nature of the subsidiary's operation is significantly different than those of the parent.