Consolidated Financial Statements. The identification of group’s boundaries for control purposes: a comparison between IAS/IFRSs versus US GAAPs

Abstract

This thesis starts from the awareness that financial information is key for investors in order to make value decisions in global capital markets where companies nowadays operate. And this is even more accentuated when it comes to multinational enterprises, organised in complex structures (usually as a group), with the aim to look beyond the stand-alone financial statements of single entities. Heretofore, data did not play such a critical role: with globalisation and state-of-the-art technologies, corporate disclosure evolved significantly. The research work is intended to fill the gap present in the literature by offering to the reader the tools for reaching a comprehensive knowledge of how control is assessed for recognizing group’s boundaries, by looking both at IFRS Standards and US GAAP Principles. Across the chapters, we will discover what control is and, at the end of the reading, we should have a strong understanding about how different consolidation models work and when they apply. We will go through their limits, differences and peculiarities, thereby adopting a transverse approach. Furthermore, we will see also how companies behave when they no longer control another entity or a pool of assets. In the last stage, fundamental to the entire analysis will be the auditors’ standpoints that will ease the overall apprehension. Eventually, we will try to sketch humble conclusive considerations regarding the relevance in assessing control to properly define the consolidation perimeter, thus conveying to investors purposeful, meaningful and worthy information about the group’s performance and helping increasingly complex businesses to improve consolidation practices aimed at facing upcoming challenges in a long-term horizon.