Controlling Financial interest is when an individual or entity buys or
otherwise obtains enough stock to point where they become the
largest holder in the company. This can happen through original
ownership and acquiring shares through purchase or trade. Push
down accounting is simply adding the obtained entity's assets and
liabilities to the buyers or new owners financials, by pushing the
assets and liabilities together the new owner consolidates the
financial statements into a single comprehensive set. Although the
most common event in implementing this method is upon a new
acquisition it is also possible b to do this when the new company
becomes the primary beneficiary of a variable interests entity,
meaning they have the controlling interest but not the majority of
shares. I believe the most important consideration to decide on
before making the election is understanding the permanence of this
decision. Once this course has been undertaken there is no going
back.
Sources:
Controlling Interest
https://www.investopedia.com/terms/c/controllinginterest.asp
Implications of Pushdown Accounting
https://www.cpajournal.com/2018/03/28
/implications-pushdown-accounting/
