Consolidated financial statements. For what, to whom and in what form to prepare

Consolidated financial statements is a financial data reporting of a group of companies, in which assets, liabilities, capital, income, expenses and cash flows of the parent enterprise and its subsidiary enterprises are presented as assets, liabilities, capital, income, expenses and cash flows of a single economic entity.

In Russia the preparation and submission of consolidated financial statements is governed by the same-name Federal law №208-FZ "On consolidated financial statements" from 27.07.2010 and the International Financial Reporting Standards (IFRS).

Successfully developing Russian companies face inevitably a question of attracting additional investments, including foreign ones. By establishing standards on the preparation of consolidated financial statements in accordance with IFRS rules, lawmakers aim to make financial statements of companies more transparent and attractive for investors. In fact most often by preparation of reporting in accordance with RSA the main task become not the formation of full-fledged information about company's financial position, but tax optimization and minimization of claims from the part of inspection authorities.

In 2014 the number of companies required to prepare, submit and publish consolidated financial statements in accordance with IFRS, was significantly expanded. Now it includes:

• credit institutions;
• insurance companies (except health insurance companies, operating exclusively in the field of obligatory health insurance);
• non-state pension funds;
• management companies of investment funds, mutual funds and non-state pension funds;
• clearing organizations;
• federal state unitary enterprises, the list of which is approved by the Government of the Russian Federation;
• open joint stock companies, whose shares are federally owned and a list of which is approved by the Government of the Russian Federation;
• other organizations, whose securities are admitted to organized trading by their inclusion in the quotation list.

There are several methods to carry out the consolidation. The choice of one or another method depends on the degree of influence of the parent company. So, for subsidiary enterprises (the interest is more than 50%) the acquisition method is of the priority, and for associated companies and joint ventures (the interest is from 20 up to 49%) – the equity method. By this, a number of procedures is the common one regardless of the method: the statements of parent company and controlled entity must be prepared as of the same accounting date, it must be complied with unified accounting policy.

To be acquainted with consolidated statements of group companies you can use the database of the Information and analytical system Globas-i®.