Rules consolidating financials
A Consolidation rule performs the account transformations that are required to consolidate data in a multi-company scenario.The types of consolidation that are performed depend on the ownership relationship between the companies that are involved.For information about how to customize these rules, see Consolidation rule templates.
The templates contain placeholders for dimension and account information that should be customized to fit the business situation.
If there is a control, then investor must account for such an investment using the as “an entity over which an investor has significant influence and which is neither a subsidiary nor an interest in joint venture”.
Here, the basic indicator of significant influence is the investors , but similarly as with subsidiaries and control, there are situations where significant influence might or might not be demonstrated regardless the size of ownership.
51 (FIN 46(R)), in 2003, describes the purpose of consolidated financial statements and the general rule of consolidation policy.
Under ARB 51, consolidated financial statements are required when one of the companies in the group directly or indirectly has a controlling financial interest in the other companies, where control is defined as having ownership of a majority voting interest (i.e., over 50% of the outstanding voting shares of another company).