Since the consolidated statements of the holding company and the
subsidiary company are based on the universal assumption that the
consolidated financial statements represents the financial position
and operating results of a single company and a business entity.
Under the all the inter-corporate transactions has to be eliminated
because existence of any inter-entity transaction will count as
double entry of a transaction. So, following the guidelines
applicable in consolidation process:
- Either company's all assets including current, liabilities
including current, equity, retained earnings, sales, costs, and
other incomes (or expenses) are combined and all inter-company
accounts are eliminated.
- Inter-company profit or loss on activities between divisions is
eliminated, so that both companies profit or loss is presented in
combination under single figure.
- The combined financial results will be addressed by the holding
company because the subsidiary company is a part of the holding
company except minority shareholders interest which is presented
separately.
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