Consolidated financial statements are the set of documents that present a group of companies as a single economic entity, as though the legal boundaries between its entities did not exist. They are the deliverable of the financial consolidation process, whereas consolidation is the work that produces them.
Five documents make up a complete set. Each carries a specific function and none is optional:
- the consolidated balance sheet, showing group assets and liabilities after elimination of internal positions
- the consolidated income statement, splitting the result between the group share and minority interests
- the consolidated cash flow statement, tracing where group cash actually came from and went
- the statement of changes in equity, including the translation reserve produced by currency translation
- the notes, which set out the consolidation scope, the methods applied and the material commitments
In France, a commercial company controlling one or more entities must establish consolidated accounts, with an exemption for small groups that stay below regulatory thresholds on total assets, revenue and headcount. Listed groups apply IFRS; unlisted groups may apply French rules under regulation ANC 2020-01.
The notes deserve particular attention because they carry what the figures alone cannot show: which entities entered or left the perimeter during the year, which method applies to each, and how comparatives were restated. An auditor reads them first.
The reliability of the whole set depends on what happened months earlier, in the entities. Phacet works at that level: consolidating data from multiple ERPs gives a common base, and closing data reliability determines whether the statements rest on agreed figures or declared ones.
