The Consolidated Balance Sheet

The Consolidated Balance Sheet

The complete picture

A consolidated balance sheet is the balance sheet of the parent company with its subsidiaries, in other words the balance sheet of the whole group. It is this which gives the complete picture, not that of the parent company alone, which forms only a part of the group. The balance sheet of the parent company is always published in addition to the consolidated balance sheet. Its

Investments in associated companies.

Interest of outside shareholders of subsidiary company.

interest to the investor is that by offering a comparison of past and present figures, it gives some indication of the growth or otherwise of the controlling company of the group. In some combines a subsidiary may have contributed the greater part of the profits.

A company is deemed to be a subsidiary when over 50% of its issued equity capital (ordinary share capital actually sub-scribed by the shareholders) is held by another company. When 50% or under is held by another company, the company whose shares are so held is an associated company, provided that the association is on long-term basis rather than short-term investment. Associated companies are often referred to as Trade Investments.


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