An affiliated company refers to a business entity wherein one company owns less than a majority of the voting stock of the other, or both entities are subsidiaries of a third company. In banking, it involves organizations that a bank owns or controls through stock holdings, or where the bank's shareholders and officers hold significant control or interlocking directorships.
A form of corporate restructuring in which a parent firm sells shares in a subsidiary through an initial public offering (IPO).
Consolidated accounts are financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as if the entire group were a single entity.
A Consolidated Balance Sheet, or Consolidated Statement of Financial Position, summarizes the financial status of a parent company and its subsidiaries as a single economic entity.
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.
A consolidated profit and loss account (also known as a consolidated income statement) combines the individual profit and loss accounts of group entities, presenting a comprehensive view of the group's financial performance.
The consolidated statement of financial position, often referred to as the consolidated balance sheet, provides a snapshot of a parent and its subsidiaries’ financial situation at a specific point in time.
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.
A controlled corporation is a company whose policies and major decisions are determined by another firm, which owns more than 50% of its voting shares.
The Cost Method is an accounting technique used by a parent company for investments in subsidiary companies, particularly when ownership is less than 20% of the outstanding voting common stock.
An equity carve-out is a type of corporate restructuring process that involves a parent company selling a minority share of a subsidiary to the public through an initial public offering (IPO). This allows the parent company to raise capital while maintaining control over the subsidiary.
Fellow subsidiaries are subsidiaries that are part of the same parent group of companies, sharing a common controlling parent company but operating independently of each other.
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.
A group company is a term referring to an organization that is either a subsidiary undertaking or a holding company within a larger conglomerate.
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.
A holding company is a type of corporation that owns other companies' outstanding stock. Its primary purpose is to own shares of other companies to form a corporate group.
A holding company is an entity that owns other companies' outstanding stock. It typically doesn't produce goods or services itself, instead, its purpose is to own shares of other companies to form a corporate group.
A formal letter written by a parent company to a lender, acknowledging its relationship with another group company and its awareness of a loan being made to that company. It is the weakest form of a letter of comfort.
A letter provided to a bank by the parent company of a subsidiary applying for a loan, offering informal assurance without a formal guarantee of repayment responsibility.
The net-investment method, often used in international accounting, is a technique applied to translate a foreign subsidiary's financial statements into the parent company's currency. This method helps in adjusting for fluctuating exchange rates and provides a consistent basis for valuation of the subsidiary’s net assets.
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.
A secondary auditor is an auditor assigned to audit the financial statements of a subsidiary company, who is not the same auditor as the one auditing the parent company's financials.
A type of corporate restructuring in which a parent company divests itself of a wholly owned subsidiary by giving its shareholders the opportunity to exchange their shares for shares in the subsidiary, thereby making it an independent entity. Unlike a spin-off where shares are distributed automatically, in a split-off, the parent company makes a tender to its shareholders, who can choose whether or not to acquire shares in the new company.
A sub-subsidiary refers to a subsidiary undertaking of a company that is itself a subsidiary of another parent company.
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.
A subsidiary company is a firm that is fully or partially owned and controlled by another company, known as the parent company or holding company. The parent company owns more than 50% of the subsidiary's voting stock, giving it control over the subsidiary's operations and strategic direction.
An ultimate holding company, also known as an ultimate parent company, is a company that holds a dominating position over a group of firms, including those subsidiaries that act as immediate holding companies for their own subsidiaries.
