Consolidated financial statements
Consolidated financial statements (often called group accounts) combine the parent company and its subsidiaries into one report, as if they were a single business. They show the group’s overall assets, liabilities, profit or loss, and cash flows in one place.
Simple group example
Company A owns more than half of Company B. In the consolidated accounts, sales from A to B and the related receivable/payable are removed so the group revenue shows only external sales.
You normally prepare them when you control another company. Intra-group balances, sales and unrealised profits are eliminated, and any non-controlling interests are shown separately. Where there is influence but not control (for example an associate or a joint venture), results are usually shown in one line using the equity method. Some groups may qualify for consolidation exemptions, depending on their situation.
What consolidated financial statements usually include:
- Consolidated statement of financial position (balance sheet)
- Consolidated statement of profit or loss
- Consolidated statement of cash flows
- Statement of changes in equity
- Notes to the consolidated financial statements
With us, anyone can handle invoicing completely.Create Invoice
