ORIGINAL COMPANY-CONTEXT PRACTICE
Model a changing synthetic ownership hierarchy
Original practice scenario: A fictional holding company has subsidiaries, joint ventures and changing ownership percentages. Design a graph for historical consolidated reporting.
Written for independent practice using company context; this is not a verified question from a company interview.
A REASONED APPROACH
Model answer.
Ownership, control and reporting scope are related but distinct concepts. Historical queries need effective dates and policy versions instead of treating today's hierarchy as timeless.
Work through it
- Assign stable legal-entity identifiers and version ownership edges, control assessments and reporting-scope decisions independently with their supporting references.
- Validate percentage ranges, overlapping effective intervals and cycles; allow explicit exceptions for legitimate complex structures rather than silently flattening them.
- Query the graph at a specified date and policy version, testing acquisitions, disposals, minority interests and delayed corrections against known synthetic examples.
Tradeoffs to discuss
- A graph expresses relationships naturally but aggregation still needs explicit elimination and consolidation rules.
Common pitfalls
- Do not infer accounting control solely from one ownership percentage.
- Keep the exercise's simplified reporting rules distinct from professional accounting conclusions.