When dealing with a company consolidation, there are important issues to consider such as reciprocity and how consolidation adjustments are handled. Consolidation involves combining the balance sheets of multiple subsidiaries under a single parent company. The same accountants appointed by the parent company prepare both the individual and consolidated financial statements, making any necessary adjustments directly to the subsidiaries' balance sheets to be reflected in the consolidated report.
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When dealing with a continued consolidation- there are several issues.docx
1. When dealing with a continued consolidation, there are several issues to consider. The first issue
is dealing with the concept of reciprocity. Please consider the following questions:
Does the same team of accountants create the traditional financial statements that do the
consolidation?
When the consolidation adjustments are made where are the adjustments recorded?
Who keeps track of these adjustments?
Solution
consolidation means joint the balance sheets of more than 2 companies which are under one
umbrella.
consolidation accounts are prepared by the team of accountants and auditors who appointed by
the parent company.
usually there would not be any adjustments, if there is any need of adjustments then they will be
adjusted in the individual balance sheets and the adjusted values carries to the consolidated
balance sheet.