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Often referred to as a Statement of Profit and Loss, or P&L, this financial report shows the revenues and expense generated and incurred by a company over a specified period of time.It shows the net gain or loss from the company's equity position during the stated accounting period.In the context of financial accounting, the term consolidate often refers to the consolidation of financial statements, where all subsidiaries report under the umbrella of a parent company.Consolidation also refers to the merger and acquisition of smaller companies into larger companies.
To consolidate is to combine assets, liabilities and other financial items of two or more entities into one.(Since the purchases of electricity by MGC from NEP and the purchases of gas by NEP from MGC did not occur outside of the economic entity they are also eliminated.) The .It will also report all of the liabilities of the economic entity.Beginning with Quick Books 2011, you can produce a new balance sheet report by class, showing assets, equity and liability, and a consolidated balance sheet for the company.If the divisions are separate legal entities, even if wholly owned, you should have separate Quick Books accounts for each company.Under some circumstances, you’ll need an upgrade or use of a third-party program to import the financial data into Quick Books.Quick Books lets you identify transactions by class, giving the user great flexibility in how to define class.Consolidated financial statements combine the financial statements of separate legal entities controlled by a parent company into one set of financial statements for the entire group of companies.For example, let's assume that Northern Electric Power (NEP) is an electric utility with its stock traded on a stock exchange.(Amounts owed and receivable between NEP and MGC are eliminated in the consolidated balance sheet.) This is a very brief overview of consolidated financial statements.It is a major topic within the university course and textbook entitled advanced accounting.