Consolidated financial statements combine the financial records of a group of companies, providing a comprehensive view of the entire group's financial situation.
Adjustments made in the process of consolidating the accounts of a group of organizations, ensuring the elimination of intra-group transactions' profits or losses from consolidated financial statements.
The term 'disproportionate expense and undue delay' refers to circumstances in traditional UK accounting practices where an individual subsidiary undertaking might be excluded from consolidated financial statements due to excessive cost and time requirements to obtain the necessary information.
In traditional UK accounting practice, 'Dissimilar Activities' served as a reason for excluding a subsidiary undertaking from the consolidated financial statements of a group. It applied to situations where the activities of one undertaking differed significantly from others in the group, potentially compromising the obligation to present a true and fair view. However, current standards under both the Financial Reporting Standard (FRS) applicable in the UK and Ireland and International Accounting Standards (IAS 27) no longer allow exclusions on these grounds.
Under specific regulations such as the Companies Act and applicable financial reporting standards in the UK and the Republic of Ireland, certain parent companies may be exempt from preparing consolidated financial statements.
A parent undertaking and its subsidiary or subsidiaries. In UK tax law, two or more companies constitute a group where one company holds more than 50% of the shares in the other(s). This test is usually applied to the voting share capital only. Where there is a group of companies, the availability of the lower rates of corporation tax is restricted.
Group accounts, also known as group financial statements or consolidated financial statements, provide a comprehensive overview of the financial status of a parent company and its subsidiaries.
Describes the grounds on which a subsidiary undertaking may be excluded from the consolidated financial statements of a group because the group's interest in the subsidiary is held exclusively with a view to subsequent resale.
Intercompany transactions, also known as intragroup transactions, refer to the exchanges of goods, services, or charges between companies within the same corporate group. For the purposes of preparing consolidated financial statements, these transactions must be eliminated or adjusted to accurately reflect the group's transactions with external parties.
An intermediate holding company is a corporate entity that functions as both a holding company for a group of companies and as a subsidiary of a larger parent company. This dual role allows it to qualify for specific exemptions from publishing consolidated financial statements.
A medium-sized group is a defined financial categorization of companies that meet specific criteria regarding net worth, turnover, and number of employees. This term is used for regulatory and reporting purposes.
Non-Controlling Interest (NCI) is a term in International Financial Reporting Standards (IFRS) used to describe the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent company.
The currency in which the financial statements of an entity are presented, which can differ from the functional currency, especially in multinational groups with subsidiaries in different countries. It often requires a common presentation currency for consolidated financial statements.
The primary auditor is the main auditor responsible for the audit opinion on a holding company's consolidated financial statements.
A quasi-subsidiary is a company, trust, partnership, or other arrangement that does not fulfill the definition of a subsidiary undertaking but is directly or indirectly controlled by the reporting entity and provides similar benefits.
A directive approved by the European Commission in 1983 and implemented in the UK by the Companies Act 1989, which governs consolidated financial statements prepared by corporate groups. Superseded by the Company Reporting Directive of 2006.
A small group is a classification under the Companies Act where specific size criteria meet and allow exemptions for certain financial reporting requirements.
A subsidiary is an undertaking that is controlled by another undertaking, often referred to as the holding or parent company. The specific criteria for what constitutes control are defined by legislation, such as the Companies Act. Typically, a subsidiary's financial statements are consolidated into the financial statements of the parent company.
An unconsolidated subsidiary refers to a subsidiary undertaking that, while a subsidiary of a group, is not included in the consolidated financial statements of the group.
