Consolidated versus consolidating financials
Income statement, balance sheet and cash flow statement are the main year-end financial statements prepared by a company.
In both a consolidated financial statement and a combined financial statement, the accountant must create a non-controlling interest account.
In other words, the holding companies will be recorded as stand-alone companies. ABC Ltd holds 55% of DEF (subsidiary) and 30% of GHI Ltd (associate).
An extract of the combined income statement will be as follows.
This increases the group's income, as a whole, compared to if the companies reported individually.
Carter Mc Bride started writing in 2007 with CMBA's IP section.
In this approach, the financial results of the parent and the holding companies are presented as a single entity.