What is the difference between consolidated financial statements and consolidating financal statements?

Answer 1

Consolidating shows detailed information by business unit of what makes up a total number, however Consolidated just shows the total figure. For instance if company Z owns company A, B and C, then the consolidating financial statements will show the details of company A, company B and Company C, whereas Consolidated financial statements will just show the total of A B and C.

Answer 2

The balance sheet of an organization shows its financial condition at a specific point in time. Monthly, quarterly and annual balance sheets tell the story of an entity's fiscal health, enabling stakeholders to assess past performance and predict future trends. Different types of organizations, such as banks and corporations, include different types of information on their respective balance sheets.

Bank Balance Sheet

• The first few lines of a bank balance sheet are similar to a company balance sheet, listing cash, securities and interest-bearing deposits. However, one of the most significant assets on a bank balance sheet is the line item for net loans -- money the bank loaned to its customers. Among the liabilities on a bank's balance sheet are interest-bearing and non-interest-bearing deposits, short-term debt and long-term debt.

  Company Balance Sheet

  • A company's balance sheet starts with its cash and cash equivalents, marketable securities and accounts receivable. Depending on the company's business, it may also list as assets items such as raw materials, finished products and inventory. A company also lists its fixed assets such as manufacturing factories, fixtures and equipment. Other assets may include intangibles such as intellectual property: patents, trademarks and copyrights. After listing assets, a company's balance sheet lists its current liabilities -- those that are due within the next 12 months -- and long-term debt, lease obligations, deferred income taxes and other non-current liabilities

  Analyzing a Balance Sheet

  • Analysts review an organization's balance sheet to assess its liquidity, defined as its ability to meet its short-term financial obligations, and its solvency, defined as the entity's ability to endure for the long term. Analysts compare the organization's current assets to current liabilities; ideally, a small business's current assets equal at least twice the value of its current liabilities. To assess an entity's solvency, analysts compare total debt to owners' equity. The measure of solvency varies from business to business. Notably, a bank primarily finances its operations with debt, while a service company such as law firm or accounting firm primarily finances its operations with owner equity.

Answer 3

Situational Differences

The steps involved in creating combined or consolidated financial statements are basically the same. One major difference between combined financial statements and consolidated financial statements has to do with the ownership of the companies involved.

A parent company with controlling interest in subsidiary companies must consolidate the financial results of the parent and the subsidiaries into one set of statements. The rationale behind this requirement is that because these companies are all operating together as a single enterprise they should report their results as though they were a single entity.

There are some business enterprises, however, where there are multiple companies operating as a single enterprise even though there is no parent-subsidiary relationship between them.

For example, a group of investors wants to set up multiple entities to handle their operations in different states: Management Co.; CA Operations LLC; NV Operations LLC; and AZ Operations LLC. In this case Management Co. does not have any ownership interest in the operations companies; it is not a parent. It does, however, act as a parent and many of the overhead expenses are paid by Management Co. The customer revenue, on the other hand, is collected and earned by the operations companies. In this case, although there is no GAAP requirement to do so, the group of investors would likely want to combine the financial statements of these entities to get an accurate picture of how the overall enterprise is performing.

The preparation and presentation of combined and consolidated financial statements are basically the same. The major difference is in the ownership of the companies involved. In a parent-subsidiary enterprise the statements are "consolidated"; if no subsidiary relationship exists the statements are "combined".

Technical Differences

There are more similarities than differences between combined and consolidated statements.

-Intercompany transactions are eliminated

-Minority interests are presented the same way

-Equity accounts are typically adjusted in consolidated statements (to not duplicate ownership balances); in combined statements equity accounts are typically added together (unless the companies have ownership in each other)

Answer 4

A common size balance sheet represents financial statements in a vertical ratio comparison form. Meaning, all financial statements can be compared easier and will compare different firms with different levels of income and different levels of assets. The common size BS is in the form of percentages, making it easier to analyze what each section of the statement produces out of 100% of the firms total revenue, assets, owners equity, etc.

A Consolidated balance sheet normally, if there are subsidiaries companies under the parent company, but are actually one company; will contain all data from each firm. In addition, the Consolidated BS is in dollars, not percentage, so this is a statement of combined financial statements represented in dollars.

Answer 5

consolidated balance sheet mean combiend balance sheet of a company having offices, properties & essart in various places.

Answer 6

Budgeted balance sheet is projected balance sheet to predict the future while balance sheet is actual balance sheet of past information.

Answer 7

simple balance sheet is of one company only while consolidated balance sheet shows the records of full group of companies.