A Brief Understanding Of The Consolidation Accounting
The term ‘consolidation accounting’ means the preparation of the consolidated financial statement from the individual financial statements of the parent undertaking and its subsidiaries. The consolidation accounting means the presentation of the financial information of the group as a single entity. The consolidation accounting helps in realizing the true picture of the holding company’s performance as a group. In the consolidation accounting the consolidated account helps the external as well as the internal agencies in knowing the true picture of the financial as well as the operating conditions of the group. Doing consolidation accounting means performing the complex set of consolidating as well as eliminating entries, while working back from the individual financial statements to a collective financial statement that would give the accurate representation of the operations of the organization.
Some of the steps that are required towards approaching the consolidation accounting procedure are:
The consolidation accounting gives a correct picture of the accounts of the business entity as a whole.