Consolidated financial statements allow organizations to create a more accurate picture of their financial position by accounting for subsidiaries. Consolidation in finance refers to the process of combining financial data from different departments or business entities within an organization, often for reporting purposes. This process is crucial in providing a clear, comprehensive view of the company's overall financial health. A consolidated financial statement is a document that represents the assets and liabilities of multiple entities in a single statement. A parent company produces it to represent its subsidiaries as part of its own financial position. The way all this financial information is consolidated will depend on whether the parent company owns a majority stake in the subsidiaries or not.