| Aspect | Balance Sheet | Consolidated Balance Sheet |
|---|
| Definition | A financial statement that shows a company's assets, liabilities, and equity at a specific point in time. | A combined statement that presents the financial position of a parent company and its subsidiaries as a single entity. |
| Scope | Only includes the financial data of a single company or entity. | Includes the financial data of the parent company and all its subsidiaries. |
| Purpose | Provides an overview of the company's financial health and position. | Offers a comprehensive view of the entire group's financial standing. |
| Entities Covered | Includes the assets, liabilities, and equity of one company. | Incorporates the financials of the parent company and its subsidiary companies. |
| Preparation | Prepared by individual companies for internal and external reporting. | Compiled by the parent company to present a consolidated view of the group's financials. |
| Reporting Frequency | Typically presented at the end of each accounting period (quarterly or annually). | Usually generated annually, although may be required for regulatory purposes more frequently. |
| Accounting Standards | Prepared according to relevant accounting standards (e.g., GAAP or IFRS). | Complies with accounting standards, ensuring uniformity and comparability. |
| Intercompany Transactions | Only includes transactions with external parties. | Eliminates intercompany transactions to avoid double-counting and provide accurate results. |
| Financial Ratios | Calculated based on individual company data. | Ratios may differ due to consolidated financial figures. |
| Minority Interests | Not applicable in a regular balance sheet. | Includes minority interests' share in the subsidiaries' equity. |
| Equity Accounting | No equity accounting; only the company's equity is presented. | Equity method applied for subsidiaries in the consolidated balance sheet. |
| Legal Independence | Each company's balance sheet is legally separate. | Legally independent, but consolidated statements provide a comprehensive view. |
| Decision-Making Aid | Assists in evaluating a single company's financial performance. | Helps in understanding the overall financial position of the entire group. |
| Tax Reporting | Used for individual tax reporting and compliance. | Used for tax reporting purposes for the entire group. |
| Currency Conversion | Assets and liabilities are typically reported in the local currency. | Requires currency conversion for subsidiaries operating in different countries. |
| Intangible Assets | May include intangible assets such as patents and trademarks. | Consolidated balance sheet may show goodwill arising from acquisitions. |
| External Investment Analysis | Provides limited insight into investments in subsidiary companies. | Provides a comprehensive view of the group's investments and their impact. |
| Disclosure Requirements | Discloses information about the company's financial position. | Additional disclosures required for consolidated financial statements. |
| Comparative Analysis | Used to compare financial performance over multiple periods. | Enables performance comparison of the entire group over time. |
| Valuation of Assets | Assets are valued at historical cost or fair market value. | May require adjustments for intra-group transactions and fair value assessments. |
| Regulatory Compliance | Meets regular financial reporting and regulatory requirements. | Complies with specific regulatory requirements for consolidated financial reporting. |
| Complexity | Simpler structure as it involves data from one entity only. | More complex as it includes multiple entities with varied financials. |
| Ownership Control | Only represents the ownership interest of one company. | Reflects the total ownership and control of the parent company over its subsidiaries. |
| Disclosures on Related Parties | Typically includes information on related parties within the company. | Discloses related party transactions within the group and with external entities. |
| Legal Liability | Liability limited to the individual company's operations. | Parent company may have legal responsibility for its subsidiaries' actions. |
| Notes to the Financials | Provides explanations and details on items in the balance sheet. | Additional notes needed to explain the consolidation process and intercompany transactions. |
| Auditor's Report | The auditor reports on the financial position of the individual company. | The auditor reports on the accuracy and completeness of the consolidated financial statements. |
