What consolidated financial statements are
Consolidated financial statements present a group of related entities, such as a parent and its subsidiaries, as if they were a single economic entity. Instead of reading each entity's accounts separately, a reader sees one combined picture of the group's financial position and performance.
To make that picture meaningful, transactions and balances between entities in the group, known as intragroup or intercompany balances, are eliminated. If one entity sells to another inside the group, that internal transaction is removed, because the group as a whole has not actually earned revenue from an outside party. What remains reflects only the group's dealings with the outside world.
Consolidation requires every entity to be mapped to a common structure, usually a shared chart of accounts, so that like items combine correctly across the group.
Consolidation in the Cohiva platform
Cohiva Crunch handles multi-entity consolidation, intercompany eliminations and a shared chart of accounts. Each entity maps to one consistent structure, internal transactions are eliminated, and the group result is produced from the combined data. Because Crunch consolidates continuously rather than at period end, a group can read its consolidated position in real time instead of rebuilding it in a spreadsheet each quarter.