- What is a consolidated balance sheet?
- Format and example of consolidated balance sheet
- How do businesses prepare consolidated balance sheet?
What is a Consolidated Balance Sheet? Definition and Meaning
A consolidated balance sheet is a financial statement that shows the financial position of a parent company and its subsidiary companies. In simple words, a consolidated balance sheet is mere consolidation of financial details of all a subsidiary including parent company and presenting as one balance sheet for the entire group.
A consolidated balance sheet is usually prepared by the business operating as a group of companies that have more than one subsidiary and it portrays the combined details of assets and liabilities.
Consolidated Balance Sheet Format with Worked Example
P Ltd acquired Q Ltd on 1.1.2018. Their balance sheet as at 31.3.2017 is given below. Using this, let us prepare a consolidated balance sheet.
P Ltd Balance Sheets as at
31st March 2017
|
Liabilities |
P Ltd ( INR ) |
Assets |
P Ltd ( INR ) |
|
Share Capital : 10,000 Equity shares of Rs 10/- each fully paid 5,000 Equity shares of Rs 10/- each fully paid |
1,00,000
- |
Fixed Assets Investments : 4,000 Shares in Q Ltd |
80,000
40,000 |
|
General reserve |
40,000 |
Stock |
20,000 |
|
Profit and Loss Account |
20,000 |
Debtors |
25,000 |
|
Creditors |
10,000 |
Cash and Bank |
5,000 |
|
|
1,70,000 |
|
1,70,000 |
Q Ltd Balance Sheets as at
31st March 2017
|
Liabilities |
Q Ltd ( INR ) |
Assets |
Q Ltd ( INR ) |
|
Share Capital : 10,000 Equity shares of Rs. 10/- each fully paid 5,000 Equity shares of Rs. 10/- each fully paid |
-
50,000 |
Fixed Assets Investments : - 4,000 Shares in Q Ltd |
45,000
- |
|
General reserve |
10,000 |
Stock |
10,000 |
|
Profit and Loss Account |
10,000 |
Debtors |
10,000 |
|
Creditors |
5,000 |
Cash and Bank |
10,000 |
|
|
75,000 |
|
75,000 |
Consolidated Balance Sheet P Ltd and it is Subsidiary Q Ltd
As at 31.12.2017
How to Prepare a Consolidated Balance Sheet: Step-by-Step Process
A consolidated balance sheet is a key financial statement in case of group companies. The financial statements of different companies belonging to the same group are consolidated to present the financial position as a whole.
Manually preparing a consolidated balance sheet involves several steps right from arriving at the share capital, profits, etc. and it is a tedious task. As a result, businesses have automated the task of consolidating financial information using accounting software. Thereby, a consolidated balance sheet is readily available when required. Not just a consolidated balance sheet but also several other key financial and accounting reports can be consolidated with a click of a button.
Using TallyPrime, you can consolidate the entire books of accounts, view consolidated reports and seamlessly compare the parent and subsidiary company's report.
In TallyPrime, you can do this by creating a group company. It allows you to conveniently view all your companies in one place.
Group company creation in Tally.ERP 9
Group companies function as a single economic entity, where financial reports such as balance sheet, profit and loss a/c and trial balance are consolidated without any impact on the transactions and real-time basis.
Using the group company, you can compare the performance of your subsidiary companies and keep a tab on the overall business.
Read More on Balance Sheet
What is Balance Sheet, How to Prepare Balance Sheet, Components of Balance Sheet, Format of Balance Sheet, Common Size Balance Sheet
