When calculating the liability of two companies that are consolidated, do we simply add the two’s corresponding liabilities? Or do we need to take off the cash investment? Also regarding Minority Interest, do we only need to take that into account in the calculation of NI?
if you are consolidating the assets, you bring on all of the sub’s assets, but must back out the “investment in sub” so you are not double counting assets. Liabilities you just add the two. Minority interest is both an income statement item and an equity item.