Intercorporate Investments Analysis Implications Debt in ConsolidatedFinancial statement Liabilities in consolidated financial statements do not operate as a lien upon a common pool of assets Creditors, whether secured or unsecured have recourse in the event of default only to assets owned by the specific corporation that incurred the liability .s If a parent company guarantees a liability of a subsidiary, then the creditor has the guarantee as additional security with potential recourse provisions BAN田 .g To assess the security of liabilities, analysis must examine the individual financial statements of each subsidiaryIntercorporate Investments Analysis Implications Debt in Consolidated Financial Statements ❖ Liabilities in consolidated financial statements do not operate as a lien upon a common pool of assets ❖ Creditors, whether secured or unsecured, have recourse in the event of default only to assets owned by the specific corporation that incurred the liability ❖ If a parent company guarantees a liability of a subsidiary, then the creditor has the guarantee as additional security with potential recourse provisions ❖ To assess the security of liabilities, analysis must examine the individual financial statements of each subsidiary