For instance if company Z owns company A, B and C, then the consolidating financial statements will show the details of company A, company B and Company C, whereas Consolidated financial statements will just show the total of A B and C.ransactions where subsidiary entities bought and sold goods or loaned each other money.
For example lets say we have Parent company P and subsidiary companies S and T. S would record revenue of ,000 and T would record expense of ,000.
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IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls.
(Since the sales of electricity from NEP to MGC and the sales of gas from MGC to NEP are not earned outside of the economic entity they are eliminated.) The consolidated income statement will also report all of the expenses that were incurred outside of the economic entity.
(Since the purchases of electricity by MGC from NEP and the purchases of gas by NEP from MGC did not occur outside of the economic entity they are also eliminated.) The .
Each of these corporations will continue to operate its respective business and each will issue its own financial statements.
However, the investors and potential investors in NEP will find it helpful to see the financial results and the financial position of the earned from outside customers.
A parent company with a controlling interest in a subsidiary consolidates the financial statements of its subsidiary into its own financial statement.
Consolidating shows detailed information by business unit of what makes up a total number, however Consolidated just shows the total figure.
For instance if company Z owns company A, B and C, then the consolidating financial statements will show the details of company A, company B and Company C, whereas Consolidated financial statements will just show the total of A B and C.
It will also report all of the liabilities of the economic entity.
(Amounts owed and receivable between NEP and MGC are eliminated in the consolidated balance sheet.) This is a very brief overview of consolidated financial statements.