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In such a case, any other variable interest determines consolidation decisions.
In making this judgment, consideration is given to the legal form of the arrangement, the contractual terms and conditions as well as other facts and circumstances.
Unless you delved deep into the company's 10-K, you may not even realize that the Saks dividend income is included in total revenue as if it were generated from sales at Federated's own stores.
In most cases, Federated would include a single-entry line on their income statement reporting their share of Saks' earnings.
This begs the question of how Federated would report their share of Saks' earnings on their income statement.This is sometimes called a non-controlling interest.The amount of interest held in the subsidiary is typically less than 50 percent; otherwise, the corporation would no longer be a subsidiary to the parent company.The relative size of ownership (generally, more than 50 percent of shares) is the key factor in assessing existence of control.However, in certain circumstances, under effective control concept control may exist with less than 50 percent of ownership.