konsernikonsolidointi

Konsernikonsolidointi, often translated as group consolidation or consolidated financial statements, is the process of combining the financial statements of a parent company and its subsidiaries into a single set of financial statements. This process is necessary when a parent company has control over one or more other companies, known as subsidiaries. The primary goal of consolidation is to present the financial position and performance of the entire economic group as if it were a single entity.

The consolidation process involves several key steps. First, the financial statements of all entities within the group are gathered. Then, any intercompany transactions, such as sales between parent and subsidiary or loans between group companies, are eliminated. This is crucial because these transactions do not represent economic activity with external parties and would distort the group's true financial picture if included. Furthermore, the ownership interests of non-controlling shareholders (minority interests) in subsidiaries are identified and presented separately.

The resulting consolidated financial statements typically include a consolidated balance sheet, a consolidated income statement, a consolidated statement of cash flows, and a consolidated statement of changes in equity. These statements provide a comprehensive view of the group's assets, liabilities, equity, revenues, expenses, and cash flows, enabling stakeholders like investors, creditors, and management to make informed decisions. Accounting standards, such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP), provide detailed guidelines on how to perform konsernikonsolidointi.