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what is the difference bitween Consolidated and Parent
Companies?

Question Posted / ganeswar reddy

Answers were Sorted based on User's Feedback



what is the difference bitween Consolidated and Parent Companies?..

Answer / viswanatha

onsolidated f/s like combined f/s sum up the reporting entities or subsidiaries transactions into a total.
The difference is that consolidated f/s will eliminate transactions where subsidiary entities bought and sold goods or loaned each other money. For example lets say we have Parent company P and subsidiary companies S and T. S sells 1,000 widgets to T for 10 each = $10,000. S would record revenue of $10,000 and T would record expense of $10,000. However when P consolidates the f/s P would eliminate that sale as an inter-entity transaction, if not, then revenue and expenses would be over stated by $10,000. P is really just moving money from one pocket to another, there is no sale where P actually gains real income.
Hope this was helpful.

Is This Answer Correct ?    6 Yes 0 No

what is the difference bitween Consolidated and Parent Companies?..

Answer / ramu naik

parent company means:- controlling to all its branches

subsidary company means:- company which are controlled by
parent company and executing orders or parent company

Is This Answer Correct ?    4 Yes 2 No

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