An affiliated company refers to a business entity wherein one company owns less than a majority of the voting stock of the other, or both entities are subsidiaries of a third company. In banking, it involves organizations that a bank owns or controls through stock holdings, or where the bank's shareholders and officers hold significant control or interlocking directorships.
Consolidated accounts are financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as if the entire group were a single entity.
A Consolidated Balance Sheet, or Consolidated Statement of Financial Position, summarizes the financial status of a parent company and its subsidiaries as a single economic entity.
A consolidated financial statement brings together all assets, liabilities, and other operating accounts of a parent company and its subsidiaries, providing an integrated view of the entire corporate group’s financial status.
A consolidated tax return combines the financial reports of companies that form an affiliated group, as defined by tax laws. This applies to firms that are at least 80% owned by a parent or another inclusive corporation.
The process of combining and adjusting financial information from the individual financial statements of a parent undertaking and its subsidiaries to prepare consolidated financial statements, which present financial information for the group as a single economic entity.
A business strategy where a large company or group splits up into multiple independent companies, or sells off subsidiaries.
A parent undertaking and its subsidiary or subsidiaries. In UK tax law, two or more companies constitute a group where one company holds more than 50% of the shares in the other(s). This test is usually applied to the voting share capital only. Where there is a group of companies, the availability of the lower rates of corporation tax is restricted.
Group accounts, also known as group financial statements or consolidated financial statements, provide a comprehensive overview of the financial status of a parent company and its subsidiaries.
A holding company is an entity that owns other companies' outstanding stock. It typically doesn't produce goods or services itself, instead, its purpose is to own shares of other companies to form a corporate group.
Intragroup transactions refer to business dealings, including sales, loans, and other financial activities, that occur between different divisions, subsidiaries, or entities within the same corporate group. These transactions need to be carefully managed and recorded to ensure accurate financial reporting and regulatory compliance.
A section or area of an organization to which revenue can be traced, together with the appropriate costs, so that profits can be ascribed to that area. Profit centres may be divisions, subsidiaries, or departments.
Push Down Accounting refers to the practice in the USA of incorporating the fair value adjustments on acquisition, including goodwill, made by the acquiring company into the financial statements of the acquired subsidiary.
A finite-life entity created by corporations for a specific, narrow purpose, such as issuing income-preferred securities. These entities are used for various financial and organizational purposes, and are also known as special-purpose vehicles (SPVs) or variable-interest entities (VIEs).
Unbundling refers to the separation of a business or its assets into distinct entities, generally achieved by selling off certain subsidiaries, business lines, or parts of a security. This strategic action can enable businesses to focus on core operations, optimize performance, and better realize underlying value.
