Items Reported in Individual Financial Statements Differently in Comparison of Consolidated Financial Statements

Among the most frequent transactions realized between related entities included in a group are sales of goods, provision of services, lending, sales of securities and other financial assets. Consolidation adjustments leading to eliminations of these transactions realized e.g. between parent and subsidiary, between subsidiaries, often leads in the different presentation of related items in consolidated financial statements in comparison of separate financial statements of entities that realized the transaction. Eliminations of selected transactions and their effect on the information presented in consolidated financial statements in comparison of individual financial statements are explicated via particular illustrative examples in this paper. These examples are based on assumption of control and therefore on the full consolidation method used for preparation of financial statements.