Consolidated financial statements are one of the basic financial documents that reflect the state of a company’s finances. In this article we will discuss this topic in detail.
What exactly is a consolidated financial statement? Definition of the term
A consolidated financial statement is a document that contains all relevant financial information about a company, including its financial results, revenues, expenses, profits and losses. It is both an abbreviated version of the financial statements and a summary of all the company’s financial transactions, including investments and liabilities. Consolidated financial statements are designed to help a company manage its financial resources and conduct its business in a reliable and legally compliant manner.
What do consolidated financial statements consist of?
Consolidated financial statements consist of several basic elements, including:
- balance sheet – which expresses all assets, liabilities and equity of the company,
- income statement – in which all revenues and expenses, as well as profits and losses of the company are expressed,
- cash flow – in which all cash flows of the enterprise are expressed,
- – information on other aspects of the company’s operations.
When are consolidated financial statements prepared?
Consolidated financial statements are prepared and published by a company at least once a year, usually with the end of the fiscal year. Consolidated financial statements are also prepared when there are changes in ownership or changes in the structure of assets and liabilities.
Consolidated financial statements – how to prepare them well?
The preparation of consolidated financial statements requires the use of many complex accounting tools. Depending on the size of the company and the complexity of its financial structure, preparing consolidated financial statements can be very time-consuming. Therefore, it is worthwhile to use the services of professional accounting firms that can help prepare consolidated financial statements. These firms have the expertise and experience to help a company accurately prepare consolidated financial statements in accordance with applicable laws.
