What is Consolidated Balance Sheet?
A consolidated balance sheet is a financial statement that combines the assets, liabilities, and equity of a parent company with those of all its subsidiaries as if they were a single economic entity. It is prepared under IFRS 10 and eliminates intra-group transactions and balances during consolidation.
How It Works
- Combine the parent’s and subsidiaries’ balance sheets line by line.
- Eliminate the parent’s investment in subsidiaries against the subsidiary’s equity at acquisition.
- Eliminate intra-group balances such as receivables, payables, and loans.
- Present non-controlling interest (NCI) separately within equity.
Saudi Context
Saudi groups with subsidiaries follow IFRS 10 as adopted by SOCPA. Tadawul-listed parent companies file consolidated statements quarterly. ZATCA requires both consolidated and standalone statements for zakat and tax purposes, since each legal entity files separately even though group reporting is consolidated.
Example
A Saudi parent’s assets are SAR 200 million and its 80%-owned subsidiary’s assets are SAR 100 million. After eliminating SAR 15 million intra-group balances, the consolidated balance sheet shows SAR 285 million in assets and the parent’s share of the subsidiary’s net assets plus NCI.