OBAVEZA SASTAVLJANJA KONSOLIDOVANIH FINANSIJSKIH IZVEŠTAJA
THE OBLIGATION TO PREPARE CONSOLIDATED FINANCIAL STATEMENTS

Summary/Abstract: The consolidated financial statements are the result of merging financial statements of group members in single financial report. These are the financial statements of a single economic unit consisting of the parent company and its subsidiaries. The obligation to prepare them belongs to group of companies in which there are relations of dominance and subordination between members, in essence groups in which there is control of one company over another. Control exists when the parent owns, directly or indirectly through subsidiaries, more than half of the voting rights of an enterprise. The consolidated financial statements are based on the balances of the group member companies. Separate balances can be the basis for preparation of the consolidated balance if they are formally and materially comparable. Formal and material comparability of separate balances is achieved by the implementation of appropriate measures by the parent company, as it has an obligation to prepare the consolidated financial statements. Furthemore, during preparation of the consolidated financial statements must be used the principles applied in the preparation of separate balances (the principle of clarity, realization, causality, truthfulness, effectiveness, etc.) and the principles which are valid only for the consolidated accounts, as the principle of legal entity fiction, the principle of equivalence, the principle of permanence and the principle of completeness.

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