Consolidating 3

Credit unions in particular offer some attractive rates to their clients and most are looking for new customers at any given time.

Without them, investors would not have an idea of how well an enterprise as a whole is faring.

However, if Company XYZ wants to consolidate its financial statements -- that is, it essentially "adds" the income statements, balance sheets and cash flow statements of XYZ and the four subsidiaries together -- the results give a better picture of the Company XYZ enterprise as a whole.

In the example below, notice how the holding company's assets are only

Without them, investors would not have an idea of how well an enterprise as a whole is faring.

However, if Company XYZ wants to consolidate its financial statements -- that is, it essentially "adds" the income statements, balance sheets and cash flow statements of XYZ and the four subsidiaries together -- the results give a better picture of the Company XYZ enterprise as a whole.

In the example below, notice how the holding company's assets are only $1 million, but the consolidated number shows that the entity as a whole controls $213 million in assets.

In the real world, Generally Accepted Accounting Principles (GAAP) require companies to eliminate intercompany transactions when the consolidate their financial statements (that is, they must exclude movements of cash, revenue, assets or liabilities from one entity to another) so as not to double count.

Some examples include interest one subsidiary earns from a loan made to another subsidiary, "management fees" that a subsidiary pays the parent company and sales and purchases among subsidiaries.

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Without them, investors would not have an idea of how well an enterprise as a whole is faring.However, if Company XYZ wants to consolidate its financial statements -- that is, it essentially "adds" the income statements, balance sheets and cash flow statements of XYZ and the four subsidiaries together -- the results give a better picture of the Company XYZ enterprise as a whole.In the example below, notice how the holding company's assets are only $1 million, but the consolidated number shows that the entity as a whole controls $213 million in assets.In the real world, Generally Accepted Accounting Principles (GAAP) require companies to eliminate intercompany transactions when the consolidate their financial statements (that is, they must exclude movements of cash, revenue, assets or liabilities from one entity to another) so as not to double count.Some examples include interest one subsidiary earns from a loan made to another subsidiary, "management fees" that a subsidiary pays the parent company and sales and purchases among subsidiaries.

million, but the consolidated number shows that the entity as a whole controls 3 million in assets.

In the real world, Generally Accepted Accounting Principles (GAAP) require companies to eliminate intercompany transactions when the consolidate their financial statements (that is, they must exclude movements of cash, revenue, assets or liabilities from one entity to another) so as not to double count.

Some examples include interest one subsidiary earns from a loan made to another subsidiary, "management fees" that a subsidiary pays the parent company and sales and purchases among subsidiaries.

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