What is Consolidated Statement?
A Consolidated Statement is a financial document that combines the financial information of a parent company and its subsidiaries into a single report. It provides a unified view of the entire group’s financial position, performance, and cash flow as if it were one entity. This approach helps stakeholders, including investors, analysts, and regulators, assess the overall health and performance of the group rather than just the parent company.
Key Features of a Consolidated Statement:
Unified Financial Picture: Combines assets, liabilities, revenues, and expenses of the parent company and its subsidiaries.
Elimination of Intercompany Transactions: Removes transactions between the parent and subsidiaries to avoid double counting.
Compliance with Accounting Standards: Must follow relevant accounting standards such as IFRS (International Financial Reporting Standards) or GAAP (Generally Accepted Accounting Principles).
Components of a Consolidated Statement:
Consolidated Balance Sheet: Shows the combined assets, liabilities, and equity of the parent and subsidiaries.
Consolidated Income Statement: Reflects the group’s total revenue, expenses, and net income.
Consolidated Cash Flow Statement: Summarizes the group’s cash inflows and outflows, showing how cash is generated and used across the group.