Consolidating financial statement

Posted by / 27-Nov-2017 19:00

However, because the subsidiaries are considered to form one economic entity, investors, regulators, and customers find consolidated financial statements more beneficial to gauge the overall position of the entity.

The consolidated financial statements only report income and expense activity from outside of the economic entity.

The Consolidated Financial Statements as of December 31, 2011 were approved by the Board of Directors of the Holding Company Sogefi S.p. Assets and liabilities are in turn shown in the consolidated financial statements on the basis of their classification as current or non-current.

An asset/liability is classified as current when it satisfies one of the following criteria: If none of the above conditions are met, the assets/liabilities are classified as non-current.

Consolidated financial statements are the combined financial statements of a parent company and its subsidiaries.Other issues relating to group accounts which remain the same under FRS 102 are as follows: Areas that have been subject to significant change relate to when a parent acquires further shares in a subsidiary and, conversely, when a parent disposes of some of its ownership interest in a subsidiary, but still retains control following the disposal.It is a common scenario in a group context where a parent company has previously acquired a controlling stake in a subsidiary (for example the parent may already own, say, 70% of the subsidiary), but then acquires further ownership interest in the subsidiary.The financial statements used for consolidation purposes are those prepared by the Boards of Directors for approval by the shareholders of the individual companies.Said financial statements have been reclassified and adjusted to comply with International Financial Reporting Standards (IAS/IFRS), and Group accounting policies. The Consolidated Statement of Financial Position is presented in two sections, showing assets on one side and liabilities and equity on the other.

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This article will not go into the detail of preparing consolidated financial statements because the principles involved are largely the same as under previous UK GAAP.

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