The Essence of the Consolidated Financial Statements Cover Image

Сутність консолідованої фінансової звітності
The Essence of the Consolidated Financial Statements

Author(s): Yana Klimenko
Subject(s): Economy, National Economy, Business Economy / Management, Micro-Economics, Accounting - Business Administration
Published by: Кіровоградський національний технічний університет
Keywords: consolidated financial statements; consolidation; related parties; parent and subsidiary; regulatory and legislative acts;

Summary/Abstract: The purpose of the article is to study the main aspects of the formation of consolidated financial statements in accordance with the requirements of domestic and international legal acts, which provide state regulation of accounting and financial reporting by related entities.The article describes the essence of the concept of consolidated financial statements in accordance with the interpretation given in domestic and international law, and from the perspective of leading scholars. At the same time, the significance and basic methods of the consolidation process have been studied. The main users of the consolidated financial statements and the need to compile them for their information needs are identified. The principles and aspects of forming consolidated financial statements data are investigated. Particular attention is paid to the study of systematization and streamlining of consolidation procedures for financial reporting.The consolidated financial statements should reflect the financial position and results of its business activities, to meet the needs of internal and external users and enable management to make impartial decisions. The method of compiling consolidated financial statements is rather complicated as it is related to the necessity of eliminating the articles. Normative legal regulation of consolidated financial statements in Ukraine is carried out in accordance with international and national standards. For more complete and effective compilation of consolidated financial statements, guidelines and provisions that take into account the specifics of industries and contain specific instructions for the formulation of consolidated financial statements need to be developed.