Handbook: Consolidation
Handbooks | November 2023
Latest edition: Our in-depth consolidation guide, covering variable interest entities, voting interest entities and NCI.
Using Q&As and examples, KPMG provides interpretive guidance on consolidation-related accounting issues in applying ASC 810. This November 2023 edition incorporates updated guidance and interpretations.
Applicability
- Companies that present consolidated financial statements
- Companies with interests in variable and/or voting interest entities
Relevant dates
- Effective immediately
Challenging and sometimes perplexing
Consolidated financial statements are presumed to be more meaningful than separate statements – based on the foundational principle that consolidated statements are usually needed for a fair presentation when one company controls another.
This presumption and foundational principle were established in 1959, and while the basic principles endure, today’s consolidation analysis has evolved dramatically since then. Sweeping changes in 2003 introduced the variable interest entity consolidation model, and 2007 brought highly anticipated guidance on accounting for noncontrolling interests.
The judgments about what it means to have a controlling financial interest and how consolidated financial statements are prepared have become increasingly challenging and sometimes perplexing.
This Handbook provides an in-depth look at consolidation and consolidation procedure. It guides you through some of the most complex literature in US GAAP and provides insight and examples to assist you in making the critical judgments necessary to execute on the principles of consolidation.
Report contents
- Scope
- What is a variable interest?
- What is a variable interest entity?
- Who consolidates a voting interest entity?
- Who consolidates a variable interest entity?
- Consolidation and deconsolidation procedures
- Presentation and disclosure
- Not-for-profit entities, entities controlled by contract, combined and parent-only financial statements
- Expected losses and expected residual returns
Download the document:
Consolidation
Download PDFExplore more
Resource
Handbook: Equity method of accounting
Latest edition: We explain the equity method of accounting in detail, providing examples and analysis.
Resource
Handbook: Business combinations
Latest edition: Our in-depth guide to accounting for acquisitions of businesses, updated for recent application issues.
Resource
Consolidation: Back-to-basics
KPMG professionals discuss the accounting requirements of ASC 810.
Meet our team
Subscribe to stay informed
Receive the latest financial reporting and accounting updates with our newsletters and more delivered to your inbox.
Accounting Research Online
Access our accounting research website for additional resources for your financial reporting needs.