Consolidating two balance sheets
Tracking intercompany transactions is perceived as one of the most common problems with financial consolidation Intercompany transactions are transactions that happen between two entities of the same company.
Not adjusting intercompany transactions results in consolidated financial statements that do not offer a true and fair view of the group’s financial situation.
If the data to consolidate is in different cells on different worksheets: Enter a formula with cell references to the other worksheets, one for each separate worksheet.
For example, to consolidate data from worksheets named Sales (in cell B4), HR (in cell F5), and Marketing (in cell B9), in cell A2 of the master worksheet, you would enter the following: Tip: To enter a cell reference—such as Sales!
Intercompany eliminations (ICE) are made to remove the profit/loss arising from intercompany transactions.
To learn more about Templates, see: Create a template.
The subsidiary’s retained earnings are allocated proportionally to controlling and non-controlling interests.
During a downstream transaction the parent sells an asset to its subsidiary: eliminating asset disposal (for parent company), asset acquired (for subsidiary), gain/loss from disposal; restoring the original cost of the asset and the accumulated depreciation based on original cost.
The sheets can be in the same workbook as the master worksheet, or in other workbooks.
When you consolidate data, you assemble data so that you can more easily update and aggregate as necessary.