Lesson: Consolidation of Equity Investments - Voting Interest Model

In this lesson, Nick Palazzolo, CPA, breaks down the consolidation method of equity investments under the voting interest model. He elucidates how ownership of more than 50% in another entity translates into a controlling interest, and how this necessitates the reporting of a non-controlling interest for the portion not owned. With practical examples, Nick clarifies the roles of the investor and investee within this paradigm, explaining the parent-subsidiary relationship and the preparation of consolidated financial statements. The goal is to provide a solid foundational understanding of how and when to apply the consolidation method, setting the stage for more in-depth discussions in subsequent lessons.