Consolidation

Consolidation is the act of making something stronger, more coherent, or more compact by combining separate parts. The term is used in several fields to describe a process of unification or hardening, often with implications for structure, authority, or function.

In business and corporate finance, consolidation commonly refers to the merger of two or more companies into a single, new entity. It differs from an acquisition, where one company absorbs another. Consolidation can reduce competition, change governance, and require regulatory approval.

Consolidated financial statements present the financial position and results of a parent company and all its subsidiaries as a single economic unit. They require removing intercompany transactions and balances and are prepared under standards such as IFRS or US GAAP.

In neuroscience, memory consolidation is the process by which labile short-term memories become stable long-term memories. It involves brain structures such as the hippocampus and neocortex and is influenced by sleep, repetition, and meaningful associations.

In geotechnical engineering, consolidation describes the time-dependent reduction in soil volume under sustained load, driven by expulsion of pore water. The theory of consolidation, developed by Terzaghi, distinguishes primary consolidation from secondary settlement and informs settlement predictions.

Other contexts include data consolidation in information systems, which merges data from multiple sources into a unified view; and legal consolidation, which merges multiple pending cases into one proceeding to streamline adjudication.