At the end of the 19th century in the United States began to prepare consolidated financial statements.The first annual accounts contain information only about the parent company, and the second was already a consolidated.Let's look at that kind of concept.
What's consolidated financial statements?
The federal law this term refers to systematic information that can help to accurately reflect the financial position of the company, results of operations and changes in financial position of the company or group of companies, which is determined in accordance with IFRS.Group companies recognize the totality of several organizations, where one has control over all the others.It can be decoded.Control is the ability to determine the other companies of its economic and financial policies in order to obtain economic benefits from its activities.
Control includes the following basic principles:
- ownership of the majority of shares with voting rights;
- control over most of the shares with voting rights;
- the right to determine the composition of the Board of Directors.
Since the consolidated financial statements supplied by the main, its representation is mandatory only in the case when the organization was set up in accordance with the law, adopted in Russia.There are some companies for which this type is mandatory.
Federal law distinguished three categories of organizations obliged to issue consolidated financial statements:
- insurance companies;
- credit card companies;
- organizations that have participated in securities trading on exchanges or other organizers of trading on the securities market.
In Russia, the most popular are the stock exchanges MICEX and RTS.Total in Russia has 11 stock exchanges, but most of them are playing in the stock market marginal role.There is also plenty of foreign stock exchanges.All companies, whose shares are in Listing Western stock exchanges, due to the need to use IFRS.Consolidated statements of familiar and credit organizations, so they are obliged to submit all documentation in this form.
Reporting Requirements
consolidated financial statements - a set of documents drawn up in accordance with the requirements prescribed in IFRS.At the moment, the system includes a set of components:
- 32 standard IAS;
- 8 standards IFRS;
- 28 standards for clarification.
Members reporting
Earlier statements from the consolidation of the Russian companies was required only for foreign investors and creditors, and now the situation has become quite different.Now be sure to prepare its financial statements in this form.First of all its users are the shareholders and the participants, but it may be unnecessary for the participants, it provides a necessary provision of such statements in the main control of the organization.For credit institutions as such a body acts as the Central Bank, while the other acts in its capacity as competent authority.Besides that reporting should be made available to regulatory authorities, the companies are required to publish consolidated financial statements for the free access to it all comers.This is done by placing it in the public system or by a publication in the media that will ensure its availability to all.
Providing consolidated financial statements should be carried out annually.Annual reporting is provided before will be a general meeting of the organization, but not later than 120 days after the end the year on which it is made.
