In the USA, a combined financial statement involves the aggregation of the financial statements of a related group of entities to present financial information as if the group was a single entity. Intercompany transactions are eliminated from combined financial statements.
A consolidated financial statement brings together all assets, liabilities, and other operating accounts of a parent company and its subsidiaries, providing an integrated view of the entire corporate group’s financial status.
The combined profit of a group of organizations presented in the consolidated profit and loss account. Any intra-group items should be eliminated by consolidation.
The Consolidated Statement of Cash Flows - A Key Financial Document Showing Combined Cash Flow Activities in Entities for Investors
The process of combining and adjusting financial information from the individual financial statements of a parent undertaking and its subsidiaries to prepare consolidated financial statements, which present financial information for the group as a single economic entity.
Control refers to the ability of one entity to direct the financial and operating policies of another entity or to obtain the economic benefits from an asset. This term is central to the consolidation of financial statements and the conceptual framework for financial reporting.
Dominant influence refers to the power exerted over a company to control its operating and financial policies, potentially treating it as a subsidiary within group accounts.
Dual-rate transfer pricing is a method where transfer prices are set at different levels for the supplying and receiving divisions within an organization, aimed at incentivizing internal transactions without penalizing either division.
This concept outlines the specific circumstances under which a subsidiary may be excluded from consolidation in a parent company's financial statements under the Financial Reporting Standard Applicable in the UK and Republic of Ireland. This ensures the financial statements provide a true and fair view.
A merger reserve, also known as merger capital reserve, is credited in place of a share premium account when merger relief is applied. Goodwill on consolidation may be written off against a merger reserve, unlike the share premium account.
A negative consolidation difference is a term used in acquisition accounting to represent a credit balance, often reflecting negative goodwill.
Negative goodwill occurs when the purchase price of an acquired company is less than the fair value of its net identifiable assets and liabilities, leading to gains in financial statements.
Purchase accounting, also known as acquisition accounting, is the method used in financial accounting to consolidate the financial statements of two companies when one company acquires another. It involves revaluing the acquired company's assets and liabilities to fair value and recognizing goodwill, if any, in the consolidated financial statements.
Senior refunding refers to the process of replacing securities maturing in 5 to 12 years with issues that have original maturities of 15 years or longer. Objectives can include reducing the bond issuer's interest costs, consolidating several issues into one, or extending the maturity date.
Severe long-term restrictions impede a holding company's ability to exercise its rights over the assets or management of a subsidiary undertaking. Such restrictions are grounds for excluding a subsidiary from consolidation and treating it as a fixed-asset investment.
