Explain why percentage of ownership an investor has in an investee is not the only consideration when determining which entities must create financial statements.

This determination depends largely on the extent to which the investor entity can direct the key relevant activities of the investee.In the case where the investor can 'control' the investee,then for accounting purposes the treatment is as two separate entities as though they were one 'economic entity' and the preparation one set of financial statements for the economic entity,often called the 'group' financial statements,is appropriate.