At the date of settlement, cash transferred is recorded at the rate prevailing on the settlement date.Any exchange difference arising is recognised in profit or loss for the year.As a result, a multinational company may have numerous foreign subsidiaries, all owned by the parent.A brings together all the financial statements of a parent and its subsidiaries into a single financial statement. However it remains in place and can be used by entities not using FRS 23. For listed entities and unlisted entities using fair value measures FRS 23 has replaced SSAP 20.
Also, many countries mandate that companies that do business in their country set up a separate company in that country.
Most of the developed nations require consolidated statements so that losses can’t be hidden under an unconsolidated subsidiary.
The International Accounting Standards Board (IASB) standards mandate the use of consolidated financial statements.
The combined company is called the consolidated company.
You can import data into the consolidated company from other companies in the same database, from other Microsoft Dynamics NAV databases, or from files.