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in todays video ill be discussing consolidated financial statements and the objective is going to be for you to know when to consolidate financial results versus when to use a simpler method of accounting like the cost method or the equity method of accounting and as youll see here in a minute it all comes down to the amount of influence the parent has in a subsidiary so the amount of influence and control uh the parent has in the sub will decide everything in terms of which accounting method to use in this case and then after that im going to walk you through an actual real life example of how to consolidate a balance sheet when you make an investment in a subsidiary but before all of that i want to walk you through a quick funny example of why we consolidate financial results in the first place so lets assume that youre trying to make a decision whether to invest in my family or not so my family is a business and youre trying to make a decision whether you want to invest in t