Loading the context…
Loading the context…
Financial results presenting a parent company and its controlled together as a single economic group.
Save conceptConsolidated financial results present a parent and its as a single economic group. They allow readers to understand operations that may sit in several separate legal companies. The group is the reporting scope, rather than just the parent company. This is why a group’s can differ from in the parent’s standalone account.
Control determines which are consolidated under the relevant accounting standards. Their income, expenses, assets and obligations are brought into the group account, with adjustments that remove internal transactions and balances. This avoids presenting a sale between two group companies as though the group had earned additional from an outside customer. Accounting policies and periods must also be considered.
Imagine a hypothetical parent sells goods costing J$60,000 to its for J$80,000. The then sells them outside the group for J$100,000. The group’s outside is J$100,000, rather than the sum of both sales. Removing the internal transaction prevents double counting. This simplified example assumes the goods have been sold externally during the same reporting period.
Consolidation does not mean each legal company disappears or that the parent owns every completely. It also does not necessarily reveal every ’s individual earnings in the headline totals. Readers should use matching consolidated figures for growth comparisons and inspect separately disclosed business information when seeking a specific operation’s result. answer a different reporting-scope question.
DMart sales rise faster than profit as quarterly margins narrow