Consolidated balance sheet

What is a consolidated balance sheet?

The consolidated balance sheet is a part of the consolidated financial statements in which the assets and liabilities of the companies included are to be reproduced in such a way that the companies are presented as a single company in their entirety. This is based on the fiction of legal unity (Section 297 (3) HGB). The combination of the prepared consolidated financial statements to form the consolidated financial statements is known as consolidation.

Capital consolidation

The capital consolidation is intended to ensure that the interrelationships do not lead to double offsetting. It is regulated in Sections 301, 302, 310, 312 HGB. In the Debt consolidation existing claims and liabilities between the companies included are offset against each other, because the group as a legal entity has no claims and liabilities towards itself.

Group-specific regulations

According to IFRS there are further group-specific regulations.

The preparation of the individual financial statements for the consolidated balance sheet serves to standardize the approach and valuation in the balance sheets of the subsidiaries and, if necessary, to convert foreign currency financial statements into euros.

The consolidated balance sheet is an important information and disposition tool for the group management. In addition, it helps the shareholders to get an idea of the economic situation of the group. However, since the group management has the opportunity to influence the reports of the individual group companies, this is not easy.

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