What is a consolidated statement?

A consolidated statement is a report prepared by the parent company of a group company. After summarizing the accounting statements of its subsidiaries, offset the related transactions and get the report data from the perspective of the whole group. That is to say, it is based on the accounting entity composed of the parent company and its subsidiaries, and the individual financial statements compiled by the holding company and its subsidiaries, which reflect the consolidated financial position and operating results after offsetting the current accounts within the group. Consolidated statements include consolidated balance sheet, consolidated income statement, consolidated cash flow statement or consolidated statement of changes in financial position, etc.

Procedures for preparing consolidated statements usually include:

(1) Check and adjust possible errors and omissions in the accounting statements of the parent company and subsidiaries.

(2) Offset unrealized gains and losses of internal transactions of enterprise groups.

(3) Write off the statutory surplus reserve, statutory public welfare fund and arbitrary surplus reserve drawn by subsidiaries to realize net profit.

(4) Offset the investment income and dividends received by the parent company from its subsidiaries, and adjust the balance of the equity investment account of the parent company to the initial amount.

(5) Offset the balance of the parent company's equity investment account and the subsidiary company's owner's equity account at the beginning of the year, and confirm the difference between them as the consolidated spread; If there are minority shareholders, it is also necessary to confirm the corresponding minority shareholders' rights and interests.

(6) Divide the consolidated price difference into the difference between the fair value and book value of the net assets and goodwill of subsidiaries, and allocate and amortize them within their effective life. China's "Interim Provisions on Consolidated Accounting Statements" does not selectively decompose, distribute and amortize the consolidated price difference, but directly shows it under the suggestion of "long-term investment" in the consolidated balance sheet.

(7) If there are minority shareholders, the net profit of subsidiaries belonging to minority shareholders in the current year shall be established on the working paper of merger, and the rights and interests of minority shareholders shall be increased accordingly.

(8) Accounts receivable and accounts payable between the parent company and its subsidiaries offset each other. Under the condition of computerized accounting, users define the relevant conditions of consolidated accounting statements according to the requirements of consolidated accounting statements, and the software automatically completes the work of consolidated accounting statements according to the data transmission and data calculation formulas designed at the time of definition. The software can automatically deduct the influence of the company's internal transactions and internal investment, and can make necessary offset processing for some report items.