The consolidated statement also known as ‘Consolidated Financial Statement’ is the financial statement of a single entity, group of entities, or multiple subsidiaries. The statement contains useful information to review the financial whereabouts of a company or group of companies. As per the “Financial Accounting standard Boards’, a consolidated financial statement is a report of an entity structured with a parent company and its subsidiaries.
- When it comes to private companies, they have very few formalities regarding consolidated financial reporting.
- Public companies must report the financial statements in line with the Financial Accounting standard Board’s GAAP (Generally Accepted Accounting Principles).
- When an organization reports in international business, the financial statements must work within the guidelines of the International Accounting Standard Board’s IFRS (International Financial Reporting Standards)
For a company to create a consolidated financial statement, professionals need to gather all the accounting and financial functions together to create financial statements that show accurate results in the balance sheet, income statement, and most importantly cash flow reporting. The filing of consolidated financial statements is mostly done on a yearly basis.