Proportional consolidation


When including a joint venture in a consolidated financial statement, this may either be done according to the equity method or it is to be consolidated proportionally. In proportional consolidation, it is only in proportion to the funds of the joint venture that assets, debts, accruals and deferrals (see accrual), and also accounting conveniences as well as expenditures and profits are included in the consolidated financial statement. Additionally, equity and debt, as well as expenditures and revenues, may only be consolidated proportionally to the participation, and the elimination process must be carried out on interim results on a proportional basis.


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