Consolidated vs consolidating financials who is melissa joan hart dating 2016
If you are an owner of a parent corporation, it's important to understand your corporation's options when it comes to financial statements and reporting.
You need to know what the financial statements show about your corporation and the subsidiary companies that the parent corporation controls.
This breakdown is not so apparent with a consolidated financial statement.
If an investor wants to know how each individual subsidiary is doing, it is helpful for the investor to see a combined financial statement, rather than a consolidated statement.
As with much of the reporting that is done specific to a business, which story you're wanting to tell—in this case, assessing the parent and subsidiaries as a whole vs.
assessing the individual components—will help you determine which financial statement format is better for presenting your information.
In fact, financial statements that were once presented on a combined basis, were often switched to consolidated presentation.
After all, if the public hasn't heard of your subsidiaries, but they can sing the jingle to your parent company or recite the commercial word for word, the investing public won't be as concerned about the subsidiaries as separate entities.If the parent company owns more than 50 percent of a subsidiary, the accountant must prepare a consolidated financial statement, rather than a combined financial statement.A combined financial statement is different from a consolidated financial statement in that it treats each subsidiary as a separate entity on paper, as it is in actual life.For example, if the parent company doesn't bring in as much money as its subsidiaries, together the parent company and its subsidiaries show how much more this conglomerate is worth than the parent company is worth alone.Accountants prepare consolidated financial statements pursuant to generally accepted accounting principles.