Presenter: Martin A. Leibowitz, Yeshiva University

Description:
Compare the reporting of an investment in a subsidiary with the reporting of an investment in a building. My poster describes and illustrates this analogy as follows:

1. An investment (paid by cash) in a building does not affect the investor's common stock, retained earnings, or dividends. The investor can report the investment as a single number ("Building") OR as the components that collectively comprise the investment (e.g., the roof, heating system, electrical components, lobby, offices, and goodwill).
2. Similarly, an investment (paid by cash) in a subsidiary does not affect the investor's common, stock, retained earnings, or dividends. The investor can report the investment as a single number ("Investment in Subsidiary") on the investor's separate balance sheet OR as the underlying components that collectively comprise the investment (e.g., the subsidiary's cash, accounts receivable, inventory, equipment, accounts payable, noncontrolling interest, and goodwill) on the parent's consolidated balance sheet.

I expect the viewer to gain the following insight into the consolidation process: An investment in a subsidiary is a set of underlying components that can be substituted for the single line item "Investment in Subsidiary." The concept is straightforward and can be visually represented.

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