Should new or reduced subsidiaries be included in the consolidated statements?

During the reporting period of disposal of subsidiaries, according to the provisions of the Accounting Standards for Business Enterprises, the parent company lost the ability to decide the financial and operating policies of the investee, and could no longer obtain benefits from its business activities, indicating that the parent company no longer controls the investee, and the investee is no longer a subsidiary of the parent company from the date of disposal, so it should not be included in the consolidated financial statements, and the opening number of the consolidated balance sheet should not be adjusted; However, the income, expenses and profits of subsidiaries from the beginning to the disposal date shall be included in the consolidated income statement.

Adding subsidiaries is more complicated.

Where an enterprise purchases a subsidiary during the year, it shall divide the subsidiary into two categories: those acquired through business combination under the same control and those acquired through business combination under different control.

(1) A subsidiary acquired through a business combination under the same control shall be deemed to be controlled by the parent company from the date of its establishment. When preparing the consolidated balance sheet, the opening number of each item in the consolidated balance sheet should be adjusted, that is, new subsidiaries should be included at the beginning and the end. When preparing the consolidated cash flow statement, the cash flows of subsidiaries from the beginning of the current consolidation period to the end of the reporting period are included in the consolidated cash flow statement. In this way, the fund balance of the consolidated cash flow statement and the consolidated balance sheet can be consistent.

(2) Subsidiaries acquired through business combination not under the same control shall be incorporated into the consolidated balance sheet from the date of purchase, and there is no need to adjust the opening amount of the consolidated balance sheet. That is, the opening number of the consolidated balance sheet does not include subsidiaries, and the closing number includes subsidiaries.