Consolidated financial statements

At the end of the 19th century,consolidated reporting. The first annual report contained information exclusively about the parent company, and the second one was already consolidated. Let's figure out what this concept is.

What is consolidated reporting?

In the Federal Law under this termmeans systematic information that accurately reflects the financial position of the firm, the results of operations, as well as changes in the financial position of the company or groups of organizations, which is defined in accordance with IFRS. A group of companies is a set of several organizations, where one exercises control over all the others. This can be deciphered. Control lies in the ability to determine for another company 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 the majority of voting shares;

- the right to determine the composition of the board of directors.

Since consolidated reporting is filedthe main company, its submission is mandatory only if the organization was established in accordance with the legislation adopted in Russia. There are certain companies for which this type is mandatory.

The federal law distinguishes three categories of organizations that are required to issue consolidated statements:

- Insurance companies;

- credit companies;

- organizations in which securities participate in circulation at trading exchanges or other organizers of trading on the securities market.

In Russia, the most popular stock exchangesare the MICEX and RTS. In total, 11 stock exchanges operate on the territory of Russia, but most of them play an insignificant role in the stock market. There is also a mass of foreign stock exchanges. All companies, whose shares are listed in the western stock exchanges, use IFRSs as necessary. Consolidated statements are familiar to credit organizations, and therefore they must file all the documentation in this form.

Reporting requirements

Consolidated reporting is a set of documents drawn up in accordance with the requirements prescribed in IFRS. At the moment this system includes such a set of components:

- 32 IAS standards;

- 8 IFRS standards;

- 28 explanations of the standards.

Reporting Users

Earlier consolidation of reporting from Russiancompanies was required exclusively for foreign investors and creditors, and now the situation has become completely different. Now it is necessary to make reports in this form. First of all, its users are shareholders and participants, but since it may not be necessary for participants, it is provided for the provision of such reporting to the main controlling organizations. For credit institutions, such a body is the Central Bank, and for others in its capacity is the authorized body. In addition, that reporting should be provided to the supervisory bodies, companies are obliged to publish consolidated accounts for the free familiarization with it of all comers. This is done through its placement in public systems or through publication in the media, which will ensure its accessibility for all.

Provision of consolidated financial statementsshould be carried out annually. The annual accounts are provided before the general meeting of the organization's participants is held, but not later than 120 days after the year for which it is completed.

</ p>