A controlling interest is when a shareholder holds a majority of a
company's voting stock. A shareholder does not have to have
majority ownership in a company to have a controlling interest as
long as they own a significant portion of its voting shares. Having a
controlling interest provides a shareholder with significant power and
influence within a company. Shareholders who have a controlling
interest are often able to direct the course of a company and make
the most strategic and operational decisions. The acquirer can elect
pushdown accounting by obtaining control of the acquired entity.
Before making an election, it is important to consider the needs of
the users of an acquired company's financial statement.
References:
Smith, T. (2020, August 21). Controlling Interest.
Investopedia. https://www.investopedia.com/terms/c/controllingint
erest.asp
(2022, April 30). 17.6 Pushdown Accounting [Review of 17.6]
Pushdown Accounting].
Viewpoint. https://viewpoint.pwc.com/dt/us/en/pwc/accounting_gu
ides/financial_statement_/financial_statement___18_US/
chapter_17_business__US/176_pushdown_accounting.html#pwc-
topic.dita_91bd356e-fae4-4b23-bc0d-51fd46e91c08
