The USV Annals of Economics and Public Administration, Vol 10, No 3

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The reconciliation between net income and equity of the parent company and corresponding values in consolidated financial statements

Stefano Azzali, Luca Fornaciari


In group accounting, the reconciliation between net income and equity of the parent company and their corresponding value in consolidated financial statements is becoming increasingly relevant. In Italy, the Reconciliation Statement (RS) has been required for all listed companies by the “Commissione Nazionale per le Societa e la Borsa” (CONSOB) since 2006. This paper illustrates the results of a study of the consolidated financial statements of 100 companies listed on the Milan Stock Exchange from 2003 to 2009, and represents around 72.40% of the capitalization of the entire stock market. The study is based on a verification of the presence and location of the RS in the financial statements of our sample companies. The study also consists of an analysis of the RS models studied and their content (consolidation adjustments) that show the differences between Net Income and Equity of the parent company and those of the consolidated financial statement. The study concludes with a proposal for a RS that may provide a solution to the issues emerging from the study.

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                     Ştefan cel Mare University of Suceava                   Faculty of Economics and Public Administration


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