Increasing use of consolidated financial statements by corporations in the U.S. and expanding incidence of investment in foreign lands means that more and more parent firms of the U.S. are faced with the problem of making objective decisions as to whether or not to include foreign subsidiaries in consolidated reports. Unfortunately, authoritative guides in this matter are lacking. The only official statement on this subject has been issued by the American Institute of Certified Public Accountants. These statements fall short of providing specific and definite standards. Attempts to apply them could lead to subjective and inconsistent policies. An objective consolidation policy requires careful evaluation of each foreign subsidiary against a set of generally accepted criteria. Four criteria have been proposed namely financial control, operating control, homogeneity and fiscal period. If the above attributes exist to the extent that the foreign subsidiary is operating as an integral part of the world wide group, then it should be included in consolidation.

Reviews the book "Foreign Trade Accounting and Management Handbook," by Jack Goldner.