What is the exact differene between consolidated and combined financials and what is the rationale for choosing one presentation format over another? Thanks
if a parent company has controlling interest in a subsidy it must consolidate the financial statements. The purpose is to show the financials as a single entity. Consolidated financials are used when multiple companies are operating as a single entitiy but there is no controlling interest. If a company opens subsidiaries in different countries that generate their own revenues and costs, etc, you would combine the financials
Your first sentence equates controlling interest with consolidation, while the second paragraph (first sentence) states the opposite. I understand that wholly- or majority-owned companies are consolidated. However, the second statement suggesting companies with their “own revenues and costs, etc are combined” doesn’t seem valid to me. Conglomerates and multinationals with many different operations in many different countries present consolidated financials as well. Can someone please clarify the exact differences between these statement types and the rationale for one choice over the other?
I know I have answered this question before. Please use the search function.