Accounting consolidating statements
When consolidating financial statements, all of the subsidiary company's assets become assets on the parent company's balance sheet.
Similarly, all of the subsidiary's liabilities go on the parent's balance sheet as liabilities.
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IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls.
Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they let you gauge the overall health of an entire group of companies as opposed to one company's standalone position.The accounting standard setters consolidation guidance determines whether your business consolidates another legal entity or not.