Definicja consolidation (FI-LC)

Co znaczy CONSOLIDATION (FI-LC):

An accounting procedure whereby the financial operating results of the companies within the group are combined to create overall results for the group in accordance with the entity theory.

According to the entity theory, the consolidated financial statements must portray the assets, the financial and income position of the group, as if all of the companies were a single corporation.

To accomplish this, all transfers of assets and services, as well as all financial relationships between the consolidated companies that affect the consolidated financial statement, must be eliminated.

The consolidation activities include the following steps:

Consolidation of investments Elimination of payables/receivables Elimination of intercompany profit/loss Elimination of revenue/expense Elimination of investment income Reclassifications

In FI-LC, these steps are represented by their corresponding consolidation entries; these are divided into eliminating entries and subgroup-dependent consolidation entries.