Why is Information Lacking?

Because consolidation is complex. But complexity shouldn’t hide the truth.

Ever wondered if you’re seeing the entire financial picture of a business group—or just a snapshot of one entity?

That’s where Ind AS 110 – Consolidated Financial Statements steps in. It ensures that when a company controls other entities, their financials are reported as one single economic unit—bringing transparency, comparability, and accountability to the forefront.

Impressive standalone numbers might grab attention, but they can hide what’s really going on behind the scenes. Consolidated statements expose intra-group dependencies, underperforming subsidiaries, and real group-level leverage. For anyone making strategic decisions, Ind AS 110 brings much-needed clarity.

Understanding Ind AS 110 – The Backbone of Group Reporting

Ind AS 110 lays down the principles for when and how to prepare consolidated financial statements. It defines:

• What control means
• Who needs to consolidate
• How to eliminate intra-group transactions
• How to treat non-controlling interests
• And how to reflect the true financial position of a business group

Why It Matters – Especially for Investors and Decision-Makers

• Holistic View of Performance: Consolidated statements reveal operational inefficiencies, unprofitable subsidiaries, or over-leveraged group structures.
• Cleaner Capital Structure Visibility: Group-level debt and intra-company exposures become more visible for better risk assessment.
• Essential for Strategic Decisions: Consolidated financials offer deep insights beyond what standalone numbers reveal.
• Better Governance and Transparency: They reflect effective control and robust financial reporting structures.

Key Principles of Ind AS 110

• Control Is the Trigger: Control goes beyond shareholding—it involves influence over decisions and variable returns.
• Uniform Accounting Policies: All group entities must align their accounting policies for consistency.
• Elimination of Intra-group Transactions: Internal sales, loans, or investments must be removed to reflect a true economic position.
• Recognition of Non-Controlling Interests (NCI): NCI must be separately disclosed to show ownership not held by the parent.

When is Consolidation Exempt?

There are narrow exemptions under Ind AS 110—such as when the parent is a wholly-owned subsidiary and the ultimate parent presents consolidated financials. Most parent entities, however, are required to prepare group-level statements.

What Makes Consolidation Complex?

• Multiple subsidiaries across sectors or geographies
• Inter-company transactions and cross-holdings
• Step acquisitions or structured entities
• Aligning accounting policies across entities
• Managing group audits and reporting timelines

The Strategic Value of Consolidation

For HNIs, family offices, institutional investors, and credit agencies, consolidated financials reveal the true group performance. They help identify:

• Core business profitability
• Cross-subsidization of losses
• Financial engineering or hidden risks
• Group-wide leverage and solvency

Final Thought

Data is the real money. And Ind AS 110 ensures the data is complete, consistent, and credible.

In an environment where decision-making depends on precision and insight, consolidated financials are not just a regulatory requirement—they're the foundation of transparency and trust.

Can standalone numbers ever reveal the true strength of a business group?