Consolidating financial statements different year ends
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Applications should comply with the requirements of the Corporations Act.
If these timing requirements cannot be met, the company needs to apply to ASIC for an extension of time to hold its AGM (section 250P).An extended financial year cannot be longer than 18 months (section 323D(4)).Under section 323D(4), entities that have to prepare consolidated financial statements have the power to synchronise.A company that owns more than 50 percent equity in another firm must consolidate, or combine, its results with the subsidiary’s data.Consolidation also applies if the firm owns less than 50 percent but exerts significant influence over the way the subsidiary operates.Consolidating financial statements is the accounting process that ultimately leads to consolidated financial statements.
Both concepts are distinct -- one refers to a process, whereas the other is the final result.A financial statement is an accounting data summary providing valuable data about a firm’s solvency, liquidity and profitability.Examples include a balance sheet, statement of cash flows, statement of owners’ equity and a statement of profit and loss.This power is only available if the accounting standards require the preparation of consolidated financial statements.It is to be used only once, in the 12 months after the need to consolidate arises; it is not otherwise available.Although it may make sense for newlyweds to share assets once they exchange vows, a couple signing a pre-nup agrees on who gets what in case of a divorce.