IFRS 10 Consolidated Financial Statement outlines the requirement for the preparation and presentation of consolidated financial statement, requiring entities to consolidate entities it controls. Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee.

Consolidated accounting is the process of adjusting and combining financial information from individual financial statements of the parent undertaking and its subsidiary to prepare consolidated financial statements that present financial information for the group as a single economic entity.

In the UK, the Companies Act 2006 now requires medium-sized groups to prepare consolidated (group) accounts. If a company is registered in the UK, its subsidiaries would need to be included within the consolidated financial statements.