An entity that controls another entity (one entity or more), by means of a controlling interest. The controlled entity is known as a subsidiary- hence the so-called parent-subsidiary relationship initiates and impacts financial reporting for a parent. This relationship entails that the parent controls its subsidiary in terms of the ability to influence and direct the financial and operating policies of the subsidiary to the benefit and best interest of the parent.

Generally speaking, this control is obtained by virtue of having majority voting rights in another company (typically more than half of the voting rights assigned to the board managing the controlled entity). However, control may be evidenced indirectly by other means including power such as an agreement with other investors (whereby more than half of the voting rights are controlled through this agreement), or when an entity controls the financial and operating policies of another entity under an agreement to that effect, etc.