consolidation adjustments

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Adjustments that need to be made in the process of the consolidation of the accounts of a group of organizations. If there have been intra-group transactions, such as sales from one subsidiary company to another, any profits or losses resulting from these transactions should be eliminated from the consolidated financial statements. For example, if one group undertaking has sold a fixed asset to another at a profit, the profit should be eliminated from both the profit and loss account and the consolidated balance sheet.

Subjects: Accounting.

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