Consolidated reporting in the postindustrial economy

Abstract

Introduction. Globalization of production and sales markets, formation of transnational companies hypercompetition at the global level and other factors of post-industrial economy have stimulated business unionizing, formation of large corporations, which can resist to changes in the competitive environment, and other risks. The main source of information in these corporations is consolidated financial reporting. There are general rules of disclosure in the consolidated accounts in national and international accounting standards and financial reporting. However, as the experience shows some of the provisions, which have been adopted at international level, are unsuitable for use in modern domestic conditions. There is also a need for adjusting the content of such statements according to changes in the structure of values of postindustrial society.

Purpoce. The ain of the article is the theoretical generalization of methods of consolidation of joint enterprises,  critical analysis of existing forms and indicators of consolidated reporting and making proposals on its improvement with the consideration o f the requirements of modern industrial society.

Results. Consolidation should be considered not only as unionizing of some  individual indicators of financial statements of related enterprises but as an accounting process that involves the use of specific methods of grouping the assets and capital, reflecting in the accounts of individual transactions, intercompany settlements and their results. Evaluation of consolidation methods shows that they largely depend on the impact of consolidated entities. This impact is determined by the size of investment and the investor's share in equity of investees which are combined into one operation. Usage of certain methods in the consolidated statements should be conducted with regard to the classical theory of property rights, the theory of the company, taking into account the practical value of reporting information for all members of the consolidated group.