rekonsolideerimise

Rekonsolideerimise refers to the process of combining or integrating previously separated or independent financial statements of different entities into a single, consolidated financial statement. This typically occurs when one company, the parent company, has control over one or more other companies, known as subsidiaries. The purpose of rekonsolideerimise is to present a true and fair view of the financial position and performance of the entire group of companies as if it were a single economic entity.

The process involves eliminating intercompany transactions, such as sales between parent and subsidiary, loans, and dividends, to avoid overstating assets, liabilities, revenues, and expenses. The assets and liabilities of the subsidiaries are added to those of the parent company, and their respective revenues and expenses are also combined. Any non-controlling interest, representing the portion of equity in the subsidiary not owned by the parent, is also separately identified in the consolidated statements.

Rekonsolideerimise is a crucial accounting practice dictated by accounting standards like IFRS and US GAAP. It provides a comprehensive overview for investors, creditors, and other stakeholders to understand the overall financial health and performance of the group. Without this consolidation, the financial statements of individual entities would not accurately reflect the economic reality of the parent-subsidiary relationship. The frequency of rekonsolideerimise is typically on a periodic basis, such as quarterly or annually.