Consolidated Vs Unconsolidated Financial Statements — IFRS 10

The concept Consolidated Vs Unconsolidated Financial Statements DEPICTS that Consolidated FS reflect the Financial Statements of ‘Parent Company’ and its ‘Subsidiary/(ies)’ as a SINGLE Economic Entity and Unconsolidated FS reflect the Financial Statements of a ‘SINGLE Entity’.

Consolidated Financial Statements

Consolidated Financial Statements reflect the Financial Position, Performance, and Cash Flows of a ‘Parent Company’ and its ‘Subsidiary/(ies)’ as a SINGLE Economic Entity. In other words, the financial statements of the parent company and all of its subsidiaries are combined into a single set of financial statements.

Unconsolidated Financial Statements

Unconsolidated Financial Statements show the Financial Position, Performance, and Cash Flows of a ‘Single Entity’, WITHOUT combining the financial results of its subsidiaries. In this case, the financial statements of the parent company and its subsidiaries are prepared separately, and the results are presented separately.

Unconsolidated Financial Statements are used when a company does NOT have any subsidiaries, or the subsidiaries are NOT significant enough to affect the financial results of the parent company. This type of financial statement is useful in understanding the financial position and performance of a specific entity without any influence from its subsidiaries.

consolidated vs unconsolidated financial statements

Consolidated Vs Unconsolidated Financial Statements – (Key Differences)

The MAIN difference is that Consolidated Financial Statements reflect the Financial Position, Performance, and Cash Flows of the parent company and its subsidiaries as a single entity, whereas Unconsolidated Financial Statements show the Financial Position, Performance, and Cash Flows of a single entity.

ANOTHER difference is that Consolidated Financial Statements are typically used when a company has subsidiaries, whereas Unconsolidated Financial Statements are used when a company does not have any subsidiaries or the subsidiaries are not significant enough to affect the financial results of the parent company.

Consolidated Financial Statements PROVIDE a comprehensive view of the financial health and performance of a group of companies, while Unconsolidated Financial Statements PROVIDE a detailed view of the financial position and performance of a single entity.

The Bottom Line

The concept Consolidated Vs Unconsolidated Financial Statements is essential for understanding the Financial Position, Performance, and Cash Flows of a company. Understanding the differences between these two types of financial statements is CRUICAL for making informed financial decisions.

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