Tuesday, 11 April 2017

Consolidated Accounts

A large group may have a hundred or more companies.

It would obviously give an incomplete picture if each of these companies gave information just about its own activities.

This is especially true when companies in a group trade with each other.

This is why the holding company must include consolidated accounts as well as its own figures.

The effect of inter-group trading is eliminated and the Consolidated Balance Sheet gives the group's position in relation to the outside world.

This does not remove the obligation for every group company to prepare and file its own accounts.

Such accounts must include the name, in the opinion of the directors, of the ultimate holding company.

No comments: