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What is the difference between the parent and subsidiary company?

Think of a parent company like the mom or dad in a family. The children would be referred to as subsidiaries. Under U.S. GAAP, if the parent company owns more than 50% of another company, then that company is considered a subsidiary and it must be consolidated with the parent company.

For example, if West owned 60% of East, then West would be considered the Parent and East would be considered the Subsidiary.

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