Companies often report two types of financial statements when they have majority stake (more than 50%) in other companies. E.g. when Company A has 60% stake in Company B, Company A will report both standalone and consolidated financial statements.
The requirement to report both consolidated and standalone results lies on the parent company i.e. Lets assume that Company A has 60% stake in B and B has 75% stake in C. In this case B will prepare consolidated results for B+C using results of C; and A will prepare consolidated results for A+B, using consolidated results of B.
Companies are required to consolidate the financials of every subsidiary in its books fully. It means that if the revenues of Company A, B, and C are $10,000, 4,500, and 2,500 respectively, Standalone Income Statement will show revenues of $10,000 (Company A), while Consolidated Income Statement will show revenues of $17,000 (A+B+C). In consolidation, revenues will NOT be proportioned to respective stake holding in the company. Revenues are not proportioned, as if we see carefully, we can say that B, and C are group companies of Company A, in which 20%, and 40% stake is held by outsiders. So for Company A, the revenues will be total revenues earned by the group. However, the proportionate part of net income is shown as a separate line item in income statement as Non Controlling Interest.
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