Consolidated Financial Statements

Published: 26/11/2018 By Thomas Agyapong

Consolidated financial statements are financial statements of a group in which the statements of the parent and its subsidiaries are presented as a single economic unit.

Subsidiary – this is a business entity that is partially controlled or fully owned by another company. Ownership is determined by holding at least 51% of the share capital.

Associates – an entity which the investor has significant influence over.

Joint venture – is an arrangement of which two or more parties have joint control.

Consolidated financial statements are required to be prepared by a parent entity, that is, an entity that has control over one or more subsidiaries.

There are exemptions to this requirement:

The parent and the group qualify as a small entity
The parent is a subsidiary of another entity.
All subsidiaries can be excluded from consolidation.

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