# Financial consolidation

> Financial consolidation combines the statements of several group entities into one P&L, balance sheet and cash flow, eliminating transactions between them.

Updated: 2026-10-02 · Author: Santiago Viglione (Fibady) · https://www.fibady.com/en/glossary/financial-consolidation

Financial consolidation is the process of combining the financial statements of several entities in the same group into a single P&L, balance sheet and cash flow, as if they were one company, eliminating transactions between them.

## How it is calculated

Consolidated = Σ each entity's statements (translated to group currency) − intercompany eliminations ± alignment adjustments.

## Example with numbers

Entity A sells 100 to external customers and 20 to entity B in the same group. B sells 80 externally. Summed revenue: 200. Consolidated revenue: 180, because the 20 between A and B is eliminated.

## How Fibady does it

Each entity connects to its ERP; Fibady maps accounts to a group chart, applies per-entity FX, leaves intercompany accounts, or entries tagged as intercompany, out of the group total, and keeps every figure traceable to the original entry.

## Frequently asked questions

### Is consolidating the same as adding up the entities?

No. Adding up leaves sales, purchases and balances between group entities inside; consolidating removes them and aligns policies and currencies.

### How often is it done?

Monthly with the management close in groups that report to management or investors. Statutory consolidation is usually annual.

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