Friend of Edsen, Each company within the group prepares its own set of financial statements, is it really necessary to compile a consolidated version for the entire group?
The short answer is: yes.
There are a number of reasons why it remains important for any group of companies to continue to prepare consolidated financial statements.
Parent companies with multiple entities, there are several advantages to financial consolidation.
1. Performance At-a-Glance
For executives, investors, analysts and owners alike, financial consolidation is the single best way to view overall performance at-a-glance. Consolidating diverse financial reports into a single financial “snapshot” gives C-Suite, finance, and stakeholders invaluable insight into the parent company’s overall health. Without consolidation, it can be extremely difficult to assess financial performance among various subsidiaries.
Financial consolidation gives leadership the top-level insight they need in order to budget, forecast and plan more effectively.
By combining multiple reports into a single consolidated financial statement, finance has more time for strategic planning. Real-time consolidation accelerates the financial close rate and streamlines intercompany eliminations.
To find out complete information regarding the importance of preparing consolidated financial statements in each group of companies, let's join our webinar at the following link.