Parent company invested in a subsidiary, how to do the parent company accounting entries

The parent company invests in a subsidiary, generally speaking, then, if it is a business combination under the same control, out of 50 accounted for 40% of 100, debit: long investment (cost method without detailed accounts) 40 capital surplus equity premium 10 credit: bank deposits 50, the same control of the merger will always look at the final consolidated party's ownership interest in the book value of the acquisition of subsidiaries to reach the control of the goodwill may have).

"Subsidiary" symmetry. Refers to a company that owns a majority of the stock of another company, either domestically or abroad. The company under its control is called a subsidiary. A subsidiary may also have its own subsidiaries, which are grandchildren of the parent company. The parent company generally has more capital and strong economic power, and can exercise highly centralized management over its subsidiaries, enjoying the right to make decisions on production and sales, capital raising, personnel arrangements, profit distribution and other major business activities of its subsidiaries. The parent company is mostly a monopoly organization and is generally a holding company. Depending on the position of the company in the control and controlled relationship, it can be divided into parent companies and subsidiaries. Companies that actually control other companies are parent companies, and companies that are actually controlled by other companies are subsidiaries. They both have legal personality. Traditionally, it is believed that consolidated accounting statements are prepared primarily for the common stockholders of existing and potential parent or holding companies (meaning those with legal dominance, hereinafter the same), emphasizing the interests of the shareholders of the parent or holding company. Shareholders' equity in the consolidated balance sheet and net income in the consolidated statement of income refer only to the portion owned and earned by the parent or holding company, while minority shareholders' equity is viewed as a liability and the net income to which the current shareholders are entitled is treated as an expense. The consolidated statement of accounts is nothing but an extension and expansion of the parent company's statement of accounts. This is the main point of the parent company theory.

In general, the parent-company theory is based on statutory control, which is usually obtained by holding a majority of the shares and voting rights (usually more than 50 percent), but can also be achieved by control agreements that place one company at the statutory disposal of another. When a certain company is under the legal domination of another company, the parent or holding company has full control over the financial and operational decisions of the subsidiary. Therefore, the parent company theory is more harmonized with the regulations in the current practice, or rather, the regulations on consolidated statements in the current practice are reflecting the main ideas of the parent company theory.