when an investor company exercises full control generally over 50 ownership over the investee company it must record its investment in the subsidiary using a consolidation method all revenue expenses assets and liabilities of the subsidiary would be included in the parent company s financial statements 
on the other hand when an investor does not exercise full control or have significant influence over the investee they would need to record their investment using the cost method in this situation the investment is recorded on the balance sheet at its historical cost 