Consolidation of financial statement is a process, where a corporate consolidate the financial statements of its affiliated entities into one financial statement, when it has significant influence / influence, as a single economic entity.
A corporation generally encounters below challenges when it consolidates financial statements.
- Using inappropriate tools and systems
- Multiple ERP systems
- Chart of account
- Different currencies
- Eliminations
- Adjustments
- Accounting principles
- Different fiscal year
- Intercompany transactions
- Dependencies on local entity close.