The conceptual framework concept and the allocation of incomes in the consolidated entity: Its impact on financial ratios

Abstract

The majority stockholders are not the same as parent company stockholders in a consolidated entity when one or more subsidiaries own parent company’s shares. In this milieu, the allocation of income could be performed: a) among majority and minority stockholders; b) among parent company stockholders and minority stockholders. Considering minority interest as a component of the consolidated equity, this paper demonstrates how the criterion used to allocate income can influence on the consolidated financial statements and, thereby, analysis based these financial statements.

Citation

Aceituno, F., Valeriano, J., Bolivar, R. and Pedro, M. (2006), "The conceptual framework concept and the allocation of incomes in the consolidated entity: Its impact on financial ratios", International Journal of Commerce and Management, Vol. 16 No. 2, pp. 95-115. https://doi.org/10.1108/10569210680000210