Proportionate consolidation

Proportionate consolidation is a method of preparing consolidated financial statements that is used for companies in which the controlling parent company holds less than 50% of the voting rights. Proportionate consolidation takes into account the minority shareholders’ interests in the assets, liabilities, sales and profits of the subsidiary.

The financial results and items of the subsidiary are included in the parent company’s consolidated balance sheet on a pro rata basis. This means that the consolidated financial statements of the parent company only take into account the shares of the minority shareholders and the shares of the parent company itself that it controls directly.

Proportionate consolidation is generally more complex than full consolidation, as it requires the precise determination of minority interests. Companies must therefore carefully follow the relevant accounting rules and standards to ensure accurate and transparent reporting.

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Proof of Concept (PoC)