Advanced English Dialogue for Business – Combined financial statement

Listen to a Business English Dialogue About Combined financial statement

Zoey: Hi Nicholas, have you heard about combined financial statements in business and finance?

Nicholas: Yes, Zoey. Combined financial statements are used when multiple companies are under common control, allowing them to present their financial information as if they were a single entity.

Zoey: Right. So, it’s like consolidating the financial statements of several related companies into one comprehensive report?

Nicholas: Exactly. Combined financial statements provide a clear picture of the overall financial position and performance of the group of companies, helping stakeholders make informed decisions.

Zoey: How are combined financial statements different from consolidated financial statements?

Nicholas: Well, Zoey, while combined financial statements are used for companies under common control, consolidated financial statements are prepared for companies under common control and also those in which a controlling interest has been acquired.

Zoey: Can you give an example of when combined financial statements might be used?

Nicholas: Sure, Zoey. Combined financial statements are often used in situations like joint ventures, where multiple entities collaborate on a project but maintain separate legal identities.

Zoey: Are there any advantages to using combined financial statements?

Nicholas: Yes, Zoey. Combined financial statements can provide a more comprehensive view of the financial health of the group, enabling better analysis and decision-making.

Zoey: How are the financial statements of each company combined?

Nicholas: Zoey, the financial statements of each company are typically aggregated line by line, with adjustments made to eliminate intercompany transactions and ensure consistency in reporting.

Zoey: Are combined financial statements subject to auditing?

Nicholas: Yes, Zoey. Combined financial statements, like other financial reports, are subject to auditing by external auditors to ensure accuracy and compliance with accounting standards.

Zoey: How do stakeholders use combined financial statements?

Nicholas: Zoey, stakeholders such as investors, lenders, and regulators use combined financial statements to assess the overall financial health and performance of the group of companies, as well as to evaluate the effectiveness of management.

Zoey: Thanks for explaining, Nicholas. I have a better understanding of combined financial statements now.

Nicholas: No problem, Zoey. If you have any more questions about finance or business, feel free to ask anytime.