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IAS 27 Consolidated and Separate Financial Statements outlines when an entity must consolidate another entity, how to account for a change in ownership interest, how to prepare separate financial statements, and related disclosures.
However, in addition, consolidated balance sheets are prepared.
This is the combined financials statements of the parent company and all of its subsidiaries.
However, it is sometimes difficult to convert the financial statements of a foreign subsidiary back into the parent company's currency.The consolidated financial statements give a valuable overview of how well the entire corporation is being managed and are useful in valuing the company as a whole.On the balance sheets, the shares owned by outsiders are shown on the balance sheet as an item.Consolidated financial statements: the financial statements of a group presented as those of a single economic entity.Subsidiary: an entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent).