What is the Difference Between Balance Sheet and Consolidated Balance Sheet?

The main difference between a balance sheet and a consolidated balance sheet lies in the scope of the financial information they present. Here are the key differences between the two:

Scope: A balance sheet displays the financial position of a single company, while a consolidated balance sheet combines the financial information of multiple companies, such as a parent company and its subsidiaries.
Purpose: A balance sheet is used to show the ownership and owing of a company at a specific time, while a consolidated balance sheet is used to present the financial status of a group of companies as if they were a single entity.
Complexity: Preparing a balance sheet is relatively simpler than preparing a consolidated balance sheet, which involves combining the financial information of multiple companies and eliminating intercompany transactions.
Preparation: Every company is required to prepare a balance sheet, while a consolidated balance sheet is prepared by the parent company only if it owns more than 50% share in any other company.
Valuation: A balance sheet records the assets and liabilities of a single company, while a consolidated balance sheet does not individually mention which assets are owned by which company.

In summary, a balance sheet provides a snapshot of a single company's financial position, while a consolidated balance sheet presents a combined view of the financial position of a group of companies, including parent companies and subsidiaries. A consolidated balance sheet is more appropriate for evaluating the financial position of a corporate group, as it eliminates intercompany transactions and provides a more accurate view of the group's financial health.

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What is the Difference Between Balance Sheet and Consolidated Balance Sheet?

Comparative Table: Balance Sheet vs Consolidated Balance Sheet

Here is a table comparing the differences between a Balance Sheet and a Consolidated Balance Sheet:

Aspect	Balance Sheet	Consolidated Balance Sheet
Definition	A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.	A financial statement that provides a comprehensive overview of the parent company and its subsidiary companies' assets, liabilities, and shareholders' equity.
Focus	Single, standalone company.	Entire corporate group, including subsidiaries.
Content	Assets, liabilities, and equity of one company.	Assets, liabilities, and equity of the parent company and its subsidiaries.
Scope	Limited to the individual company.	Includes details of the parent company and its subsidiaries.
Complexity	Less complex than a consolidated balance sheet.	More complex and detailed compared to the balance sheet.
Preparation	Prepared by the individual company on its own.	Prepared by the parent company.
Purpose	Used to show the financial statement of a single company.	Used to show a financial statement of multiple companies, such as the parent company and its subsidiaries.

In summary, a Balance Sheet provides a snapshot of a single company's financial position, while a Consolidated Balance Sheet presents the combined financial information of a parent company and its subsidiaries, offering a more comprehensive view of the entire group's financial status.

Guilherme Mazui

Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.