Consolidated Financial Statements
Financial reports that combine the information of a parent company and its subsidiaries as a single economic entity, eliminating intercompany transactions.
Consolidated Financial Statements
Financial statements that combine the financial information of a parent company and its subsidiaries, presenting them as a single economic entity while eliminating intercompany transactions.
Consider a multinational corporation with operations in 20 countries. Its consolidated financial statements combine all subsidiary results while eliminating intercompany loans, sales, and investments to present the group’s financial position and performance as if it were one company.
Consolidation provides a comprehensive view of a business group’s financial reality by preventing double-counting of assets, liabilities, and transactions between related entities. This approach offers stakeholders a clearer picture of the overall economic substance of related business operations.