consolidated financial statements

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The financial statements of a group of companies obtained by consolidation. These are required by the Companies Act and Financial Reporting Standard 2, Accounting for Subsidiary Undertakings. The information contained in the individual financial statements of a group of undertakings is combined into consolidated financial statements, subject to any consolidation adjustments. The consolidated accounts must give a true and fair view of the profit or loss for the period and the state of affairs as at the last day of the period of the undertakings included in the consolidation. Subsidiary undertakings within the group may be excluded from consolidation and the parent company itself may be exempt from preparing consolidated accounts.

Accountants also need to be aware of International Accounting Standard 27, Consolidated and Separate Financial Statements, and International Financial Reporting Standard 3, Business Combinations.

Subjects: Financial Institutions and Services — Accounting.

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