Consolidating balance sheets accounting

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To consolidate is to combine assets, liabilities and other financial items of two or more entities into one.

One business may acquire another to eliminate a competitor, to gain access to critical technology, to insure a supply chain, to expand distribution networks, to reach a new customer base, and so forth.Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements.It plays a pivotal role in indicating the financial health of the entity, to help the users of the statement to take rational decisions.It is not exactly same as a consolidated balance sheet.

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