Piotr Klimowicz
Business Development Manager
The consolidated financial statement is a document that provides a comprehensive summary of the activities of the entire capital group. At the end of the financial year, every company is required to prepare a document containing information on its annual activities from a financial perspective.
The consolidated financial statement is prepared at the level of the parent entity, i.e. the entity that exercises control over other entities in the group (subsidiaries, jointly controlled entities). This process requires detailed knowledge of accounting and familiarity with the regulations governing the functioning of capital groups. This is precisely why many organisations choose to work with professional external entities.
Consolidated financial statements – who is it for?
The obligation to prepare the financial statements of a capital group applies primarily to parent entities that exercise control over other entities. Such control may arise from holding a majority of votes in governing bodies, the right to appoint or dismiss members of the management board, or other forms of influence over financial and operational policy. It is worth noting that the Accounting Act also provides for certain exemptions from this obligation.
Consolidated financial statements do not need to be prepared by capital groups that have not exceeded certain size thresholds. This applies to situations where the combined data of the parent entity and all subsidiaries at every level, before the application of consolidation eliminations, do not exceed two of the three threshold values specified in the regulations.
Capital group financial statements at KR Group
The consolidated financial statement should reliably present the asset position, financial position and financial result of the entire group. At KR Group we have a team of experts with many years of experience in servicing capital groups operating in various sectors of the economy.
Professional tax advisory services are an integral part of the financial statement consolidation process. Our tax and accounting group provides comprehensive support at every stage – from the analysis of the capital structure to the final preparation of documentation. This enables the efficient execution of the entire reporting process and reduces the risk of errors that could affect the assessment of the financial position of the capital group. By using the services of a professional company providing accounting outsourcing, it is possible to precisely verify whether a given group is subject to the consolidation obligation.
Consolidated financial statements of a capital group – KR Group offer
- Preparation of the consolidation template together with notes and consolidation inclusions.
- Preparation of the consolidation for a given year in accordance with the Accounting Act (UoR) or IFRS.
- Preparation of the consolidated financial statements together with notes and the descriptive section.
- Preparation of the group’s activity report.
- Verification of uniform valuation principles.
FAQ
What are consolidated financial statements?
Consolidated financial statements are a document presenting the asset and financial position of the entire capital group as a single economic entity, taking into account the elimination of mutual transactions. They encompass data from all subsidiaries and provide a complete picture of the financial results, assets and liabilities of the entire group, facilitating the assessment of its economic condition by investors and financial institutions.
What does a consolidated financial statement consist of?
In accordance with the Accounting Act consolidated financial statements consist of the following elements:
- consolidated balance sheet;
- consolidated profit and loss account;
- consolidated cash flow statement;
- consolidated statement of changes in equity (fund);
- supplementary information, comprising an introduction to the consolidated financial statements and additional information and explanations.
Each of the above elements requires careful preparation and verification for compliance with applicable accounting standards.
What does a consolidated financial statement cover?
The consolidated financial statement encompasses the financial data and operating results of all entities forming part of the capital group as a single entity. The consolidated financial statements therefore present a complete picture of the asset and financial position of the entire capital structure – eliminating mutual transactions between related parties. This enables stakeholders, investors and financial institutions to obtain a transparent and comparable picture of the economic condition of the entire capital group, rather than only of the individual companies forming part of it.
Why choose KR Group for the preparation of consolidated financial statements?
We specialise in comprehensive company services – from small entities to complex capital structures operating in multiple markets. Consolidated financial statements of a capital group prepared by our team meet the highest quality standards. We operate in Poland, the Czech Republic, Romania, Hungary and Slovakia, making us an ideal partner for international capital groups.
Our partnership approach and extensive experience in serving clients from various industries mean that we understand the specifics of running a business. The financial statements of a capital group require an individual approach – we tailor solutions to the needs of each organisation, taking into account its structure and the nature of its activities. This enables us to ensure the efficient execution of reporting processes, minimising the risk of errors and supporting companies in making informed financial and strategic decisions.
Who is obliged to prepare the financial statements of a capital group?
This obligation rests with the parent entity, which exercises control over the other entities forming part of the group, and the prepared statements should present the financial position of the entire group as if it were a single economic organism. In addition, this document is prepared in accordance with specific accounting regulations and is subject to approval and publication within the deadlines specified in the applicable regulations.
What are the deadlines for preparing the consolidated financial statements of a capital group?
The consolidated report must be prepared within the period specified in the Accounting Act – standardly this is three months from the balance sheet date, i.e. the last day of the financial year. In practice, this requires the prior collection of financial data from all companies forming part of the group, in order to meet the statutory deadlines and ensure the correctness of the documentation, as well as to efficiently carry out the process of its verification and approval by the relevant authorities.
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