Consolidated versus consolidating financials

Posted by / 06-Apr-2020 13:47

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.

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In this approach, the financial results of the parent and the holding companies are presented as a single entity.