A critical feature of 'consolidated accounts' is the necessity for each subsidiary company to agree their balances with each subsidiary. One should find that on consolidation they will balance each other out to zero. The reason is that trading between subsidiaries is 'internal' as far as the group is concerned. The consolidation only reflects 'third party trading'.
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Clifford Moggs CMA
Consultant
Reading
United Kingdom
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Original Message:
Sent: 10-12-2014 05:15 PM
From: Mohammad Al Ghamdi
Subject: Contrary Account
Do contrary balances between inter-companies exist in a consolidated year end balance sheet. Please explain
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Mohammad Al Ghamdi
Executive Officer
Saudi Arabia
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