What is the overall goal of consolidated financial statements? Why are 100% of the assets and liabilities of an investee included in the parent's financial statements, when only 51% of them may be actually owned?

The overall goal of consolidated financial statements is to provide a comprehensive and accurate view of the financial position and performance of a group of companies, referred to as a parent and its subsidiaries, as a single economic entity. These statements are prepared by combining the individual financial statements of the parent company and its subsidiaries to reflect the group's financial activities and results.

When preparing consolidated financial statements, all significant subsidiaries are included to present a complete picture of the group's financial position. This includes including 100% of the assets and liabilities of an investee, even if the parent company does not fully own it. The reason is that companies are required to consolidate entities over which they have control.

Control is generally determined by ownership of more than 50% of the voting rights or through other contractual arrangements that provide power over the investee's financial and operating policies. If a company has control over another entity, it is deemed to have the ability to direct the activities that significantly impact the investee's economic performance. Thus, even if a parent company owns only 51% of the voting rights or has a majority interest, it is considered to have control over the investee and therefore includes 100% of its assets and liabilities in the consolidated financial statements.

Including 100% of the assets and liabilities of an investee is necessary to ensure that the consolidated financial statements provide a fair and accurate representation of the group's financial position and performance. It allows users of the financial statements, such as investors, creditors, and regulators, to evaluate the group as a whole and make informed decisions based on a complete view of its financial standing.