Process consolidating financial statements

Since the process of preparation and issuance of consolidated financial statements imposes huge costs, there are certain reliefs to be applied both from consolidating every subsidiary and from obligatory presentation of consolidated financial statements.

The article analyses the conditions under which consolidation exemption may be applied by the companies together with development this topic has undergone in recent years.

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In the consolidated report, the transactions among subsidiaries or a subsidiary and a parent company are eliminated to avoid double counting.

Consolidating financial statements in Business Works is a process that involves combining and summarizing the reports of business performance of a parent company with those of its subsidiaries using an accounting program.

International Financial Reporting Standards require entities to primarily present consolidated financial statements.

When the relationship of control is identified, the investor consolidates all controlled entities and presents financial statements for the whole group as if it was a single economic unit.

These statements are often prepared with the use of financial consolidation software which takes financial figures from each individual subsidiary and combines them into one overall report.