SERIES: The questions for a first consolidation: 1 / 4

March 11, 2020

Whom and Why use Consolidation ?

Are you a Group that is obliged to produce consolidated accounts for the first time ? To do so, various organizational and financial points must be taken into account.

The consolidation of the accounts is a compulsory step for companies that exceed a certain threshold:

  • A turnover greater than or equal to 48 million euros.
  • A balance sheet total greater than or equal to 24 million euros.
  • A number of employees greater than 250.

In addition, it can also be useful to communicate a group financial vision and facilitate decision-making.

How are the consolidated financial statements prepared?

  • Defining the scope of consolidation
  • To restate the parent company financial statements to make them consistent with Group and consolidation standards.
  • Translation of restated parent company financial statements into group currency
  • Integrate restated corporate balance sheets and income statements and convert them according to the integration method
  • Eliminate reciprocal and non-reciprocal intercompany transactions
  • Processing equity sharing entries
  • Prepare consolidated financial statements

How to succeed in its first consolidation?

The consolidation process cannot be improvised and requires the implementation of an approach that is well anticipated and adapted to the groups implementing it.

The elaboration of an implementation schedule is essential and depends on a certain number of factors specific to each group:

  • Periodicity in terms of mandatory publication and audit of the statutory consolidated financial statements
  • Periodicity in terms of the voluntary preparation of consolidated financial statements
  • Periodicity in terms of preparing certain steps such as the identification and reconciliation of intra-group transactions
  • Closing date of the corporate financial statements
Would you like to know more? Don’t hesitate to contact us.