Term · Accounting & Data Quality
Consolidated financial statements
In briefThe consolidated financial statements combine the accounts of a parent company and its subsidiaries. For smaller issuers with several subsidiaries or foreign projects they usually provide the most complete view of the overall situation.
Definition
Combined financial statements of a parent company and its subsidiaries.
How it is calculated
Formula. Not a metric – consolidated financial statements under IFRS 10 or §§ 290 ff. HGB.
Why it matters for small caps
For smaller listed companies with several subsidiaries or foreign projects, the consolidated financial statements often provide the most complete view of the overall situation.
Common misreadings
- The parent's single-entity financial statements are wrongly taken as a complete picture, although material activities may lie in subsidiaries.
In the process
Frequently asked
What are consolidated financial statements?
They are the consolidated accounts of a group of companies, presenting parent and subsidiaries together. The basis is IFRS 10 or §§ 290 ff. HGB.
What is the purpose of consolidated financial statements?
They show the economic overall situation of the group rather than just the parent company. This makes group-wide activities and risks visible.
Why are the parent's single-entity statements not enough?
Material activities can lie in subsidiaries that do not appear there. Anyone who looks only at the single-entity accounts gets an incomplete picture.
Related terms
Sources
Primary
IFRS Foundation – IFRS 10 Consolidated Financial Statements
https://www.ifrs.org/issued-standards/list-of-standards/ifrs-10-consolidated-financial-statements/
https://www.ifrs.org/issued-standards/list-of-standards/ifrs-10-consolidated-financial-statements/
Methodology
Bundesministerium der Justiz – Handelsgesetzbuch (HGB)
https://www.gesetze-im-internet.de/hgb/
https://www.gesetze-im-internet.de/hgb/
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.