Invest in Sub
The Holding Company has investment accounts on its books that need to be eliminated. The equity in the holding company does not get eliminated. This is the Investment half of the famous “Investment-Equity” elimination. Percent Consolidation (PCON) for a holding company is generally 100 percent and Percent Ownership (POWN) for a holding company is generally 100 percent. Consolidation rules are written to reclassify investment into the investment plug account.
The Subsidiary Companies have equity on their books that roughly offsets the investment on the Holding Company’s books. This is the Equity half of the famous “Investment-Equity” elimination. As a general rule of thumb, companies owned between 51 and 100 percent are considered ...
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