IndexIndividual Project Unit 4Consolidated Financial StatementsAT&T, IncGoodwill – AT&TGoodwill – FASBUnit 4Individual ProjectThere are many fundamental principles that dictate the consolidation of financial statements. Some of these factors include the FASB, or Financial Accounting Standards Board. Generally accepted accounting principles, or GAAP, traditionally require consolidation of financial reporting with the financial reports of any company in which it also has a controlling financial interest. There are two test models that you can use to determine your controlling financial interest, these models are known as the Variable Interests Entity model and the Voting Interest model. A variable interest entity (VIE) is where a company is able to control and structure economic performance and has the obligation to absorb losses or accept significant benefits. If, using this model, it is determined that a specific company is not a variable interest entity, then it is considered a voting interest entity. A controlling interest corporation is a corporation that holds 50% or more of the voting shares of an entity. However, this guideline has some limitations. A parent company may go around and avoid VIE guidelines, thus allowing it to engage in what appear to be unethical practices. They can only do this by disclosing specific information ("Fasb Problems Update", 2014). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original EssayConsolidated Financial StatementsConsolidated and balance sheet accounting methods are very different. The main difference is that with consolidated accounting, subsidiaries practically do not exist within the scope of financial reporting purposes. The financial statements of both the subsidiary and the parent company are brought together and combined into a single set of financial statements used solely for reporting purposes. These new consolidated financial statements are advantageous when an investor has a controlling interest in an investee by obtaining ownership of at least 50% of the total voting shares (Hoyle, Schaefer & Doupnik, 2013). AT&T, IncAT&T, Inc. has recently become a hotly discussed topic with its new acquisition of DIRECTV. Before the merger, AT&T already had a large stake in the DIRECTV company. AT&T holds highly diversified investments, including 38% in Otter Media Holding, 47% in YP Holding, and a 40% stake in Roots Sports Southwest. They have also invested in other companies including Leap, Nextwave, Atlantic Tele-Network, NII Holding Inc. and GSF Telecom. Many of their other acquisitions were omitted from the annual financial report. AT&T adheres to the equity method of accounting in all of its investments in which it holds less than 50% of voting stock (“AT&T INC 2014,” 2015). This equity method is only used when an investor has a lot of influence over those he or she is investing in, but without having control through ownership of 20-50% of voting shares (Stice & Stice, 2012). This accounting method shows a company's investments on the balance sheet but not on that of the investee. Goodwill – AT&TThe asset known as goodwill is intangible and has a subjective value. View the difference between acquired assets and liabilities (“Goodwill,” 2015). In 2014, AT&T had $69.5692 million in goodwill and $69.273 in 2013, as can be seen in the 2014 consolidated balance sheet. The Leap acquisition and Connecticut sale are reportedly related to the amount of startup in 2014. AT&T uses both a.