Consolidated Financial Statements

Definition

Combining financial results from a parent company and all its subsidiaries into one statement—to hide where the actual problems are located.

Example Usage

The consolidated financials look fine, but the subsidiary is actually bleeding cash.

Origin

Accounting standard for multi-entity companies

Fun Fact

Consolidation can hide whether individual business units are profitable since you can't tell which divisions are failing

Source: FASB ASC 810 (Consolidation)

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