Why do noncontrolling interests arise in connection with consolidated statements but not with investments in affiliated companies accounted for under the equity method?

A. In consolidated statements, all the assets and liabilities of the parent and subsidiary are added together in the statements. The financial statements must reflect that the subsidiary is not controlled by the parent. In contrast, with an affiliated company, only the parent's proportional interest in the affiliated company is added into the financial statements. It is not necessary to disclose the noncontrolling interest of the parent.

B. In consolidated statements, all the assets and liabilities of the parent and subsidiary are added together in the statements. But the shareholders of the parent do not own all of the combined assets andliabilities, so the interests of the minority owners must be subtracted. In contrast, with an affiliated company accounted for using the equity method, only the parent's proportional interest in the affiliated companies are added into the financial statements.

C. In consolidated statements the equity method is used and this accounts for the interest of the minority shareholders. With an affiliated company, the proportional share of the assets and liabilities of the parent and subsidiary are added together in the statements. It is not necessary to account for the interests of the minority owners.

D. None of the above are correct.