consolidated balance sheet

 Q.What is consolidated balance sheet and what are the points to note while preparing the consolidated balance sheet.

a consolidated balance sheet refers to a statement prepared collectively by companies. 

Points to Note While Preparing a Consolidated Balance Sheet 

The main points to note while preparing a consolidated balance sheet are as follows: 

1. When preparing a consolidated balance sheet, one should first determine which is the holding company and which is the subsidiary company. 

A holding company refers to a company that acquires shares. And a subsidiary company refers to a company that sells shares. 

2. When preparing a consolidated balance sheet, goodwill or capital reserve and minority interest should be calculated. 

The interest of minority shareholders refers to the interest of those shareholders of the subsidiary company whose shares have not been purchased by the holding company. 

3. When preparing a consolidated balance sheet, the share capital, reserve and surplus, credit balance of the profit and loss account (balance of p/l), and fictitious assets of the subsidiary company should not be written. 

For example: preliminary expenses, discount on issue of share and debenture. 

4. When preparing a consolidated balance sheet, only the share capital of the holding company should be written. 

2. When preparing a consolidated balance sheet, the investment made by the holding company to purchase shares of the subsidiary company should not be written.