Behöver ditt bolag upprätta koncernredovisning?

Does your company need to prepare consolidated financial statements?

Share on facebook
Share on twitter
Share on linkedin

Parent companies prepare separate consolidated financial statements in addition to their regular annual accounts. The purpose is to describe the financial status of the parent company and all subsidiaries as a whole. But which companies need to prepare consolidated financial statements and what should they contain?

Who has to prepare consolidated financial statements?

Almost all parent companies covered by the Annual Accounts Act are required to prepare consolidated financial statements, but there are some exceptions.

Small groups do not need to prepare consolidated financial statements

To be classified as a small group, you must not exceed two out of three limits. The three limit values are:

  • Group companies have, on average, had a maximum of 50 employees in group companies over the past two financial years
  • Net sales have amounted to a maximum of SEK 80 million in the last two financial years
  • The net value of the assets of group companies has amounted to a maximum of 40 million in the last two financial years

The specialist gives his best tips: How to succeed with your group consolidation

Certain exemptions for parent undertakings which are also subsidiaries

If the parent company in question is also a subsidiary, sometimes no consolidated financial statements are required. The exemption applies if the parent company (which is also a subsidiary) has a parent parent company. If consolidated financial statements are prepared by the parent parent and all of its subsidiaries, the exemption applies if:

  • The consolidated financial statements are prepared and audited in accordance with the legislation of the EU Directive 2013/34/EU
  • The consolidated financial statements are prepared and audited in accordance with the international accounting standards of Regulation (EC) No 1606/2002
  • The consolidated financial statements are prepared and audited in accordance with accounting standards that have been deemed equivalent by the European Commission

With subsidiaries of no material importance

Consolidated financial statements need not be prepared if the subsidiaries can be excluded for any of the following reasons:

  • The subsidiaries are of no material importance for the group’s results and position to be reproduced in a fair manner
  • The parent’s ability to influence the subsidiary is severely limited by persistent and significant obstacles
  • The parent company lacks the necessary information to prepare the consolidated financial statements and cannot be collected within a reasonable time at a reasonable cost
  • The parent company temporarily owns the shares in the subsidiary with the aim of reselling them

You can always choose to prepare consolidated financial statements, even if it is not a requirement for your group.

What if a parent company does not prepare consolidated financial statements?

If your parent company is exempted from the requirement to prepare consolidated financial statements, it should be noted in the annual report which company prepares the consolidated financial statements instead. The parent company is expected to submit a copy of the consolidated financial statements in connection with the submission of its own annual report to the Swedish Companies Registration Office.

What should a consolidated financial statement contain?

There are many form requirements to relate to when working with consolidated financial statements. It is of the utmost importance that the underlying figures are correct in order for the consolidated financial statements to give a fair picture of the financial situation in the Group.

Certificate of
declaration
The document that certifies that the Group’s income statement and balance sheet have been adopted by board members and the CEO during the Annual General Meeting is called a certificate of declaration.

Board of Directors’ report
The part of the annual report that provides information on the company’s development, position and results is called the annual report. The annual report also includes significant events that have taken place in the Group during the last financial year. For example, it can be:

  • Decisions on important changes (sale or purchase of subsidiaries, new major agreements or investments, etc.)

  • External factors that influenced the company’s performance (exchange rates and interest rates, environment, market changes, etc.)

  • Possible control balance sheet

  • If the company is not expected to continue its activities

Consolidated balance sheet
A consolidated balance sheet combines the parent and subsidiary companies’ balance sheets into one and the same. Some entries are eliminated. The acquisition analysis is important here as the basis for the entire consolidated financial statements.

Consolidated income statement
The purpose of the consolidated financial statements is to reflect the Group’s total earnings. The income statement therefore eliminates all internal profits arising from business between companies within the Group.

Cash flow statement
The cash flow statement provides a summary of the Group’s annual money flows. It provides a clear insight into the day-to-day operations, investments and financing situation in the Group.

Sheet music
A list of subsidiaries and other companies in which the Group has interests shall be included in the consolidated financial statements.

Digital tools for consolidation

With the help of digital tools, you can get a much smoother reporting and group consolidation in the group , by managing eliminations, minority ownership, international subsidiaries, etc. for you.

5 quick answers about consolidated financial statements

Here we have gathered some frequently asked questions regarding consolidated financial statements, from what applies to international subsidiaries to who is held responsible for the content.

1. Who is responsible for the content of the consolidated financial statements?

Responsibility for the content of consolidated financial statements can never be transferred to an accounting consultant or employee. The ultimate responsibility always lies with the board.

2. Who needs to sign the consolidated financial statements?

The consolidated financial statements need to be signed by all board members and the parent company’s CEO.

3. Where are the consolidated financial statements published?

When the parent company’s annual report is published, the consolidated financial statements are usually included as a financial report.

4. What about international subsidiaries?

Any foreign subsidiaries shall also be included in the consolidated financial statements. The currency should be converted to that of the parent company.

5. For what period does the consolidated financial statements apply?

Consolidated financial statements cover a financial year and normally need to be prepared at the end of each financial year.

Complicated and time-consuming group reporting?

Now you can test Boardeaser for 30 days for free!

Are you looking for a system that makes your reporting and consolidation faster and better?

With Boardeaser, you can automate the entire group reporting and save valuable time, while increasing quality.

During a demo, you will get, among other things:

  • tailored review of the platform’s features
  • answers to your questions and concerns from one of our experts
  • tips on how to work smarter (instead of harder)

Book a demo by filling out the form on the right. We will get back to you as soon as we can with suggestions for times.

Book a demo of our platform

Read more posts

Skriva vd-rapport

How to write a good CEO report

Are you going to write a CEO report? We sort out what your report must contain, how to choose key figures and how to present data so that the entire board understands.