Consolidated statements: one group, one story
See beyond the individual company
Try the interactive lessonLet’s make it simple.
Consolidated statements show a parent and its controlled subsidiaries as one economic entity. Add their balances, then eliminate transactions and balances within the group to avoid counting internal activity.
Picture this.
A parent reports $1,000 of sales, including $200 to its wholly owned subsidiary. The subsidiary reports $500 of sales to outside customers. Consolidated revenue is $1,000 + $500 − $200 = $1,300.
Check your understanding
A parent has $1,000 of sales, including $200 to its subsidiary. The subsidiary has $500 of external sales. What is consolidated revenue?
Think it through, then reveal the explanation
Add $1,000 and $500, then eliminate the $200 internal sale: $1,300. This simplified exercise assumes full control and focuses only on revenue elimination.
Build the bigger picture.
- Identify the controlled group
- Combine company balances
- Eliminate internal transactions
- Present consolidated statements
Define the group before combining it. Internal activity is eliminated before presenting one set of statements.
Now make it move.
Bring this idea to life with interactive practice, a 3D illustration and tips along the way. Your progress stays on your device.
Practice One Group, One Story