As a general rule: If you own more than 50% of an entity, you should report consolidated statements. This is when you would eliminate all intercompany transactions at year end. If you own 50% or less, you will use the equity method and will not prepare consolidated statements. In this case, intercompany accounts will not be eliminated but you will need to have a footnote disclosure.

Just to clarify a little further, the eliminating entry for an aquisition is prepared on the aquisition date, but isn't actually entered into either of the companies accounting systems. Think of it as writing yourself a "reminder" on the back of a napkin. Then for the parent's year end statements, break out that "napkin" and use the entries to consolidate the parent and sub-entity's statements.

Hope this helps!