Capital group is a group of at least two companies that remain with each other in capital relations. Capital group consists of the parent company and subsidiaries (controlled by the parent) or affiliates. The parent company is a joint stock company, limited liability company or other company that has one or more subsidiaries (affiliates). In complex group structures may happen that the parent is a subsidiary of a higher order parent company.
With regard to the parent subsidiary is characterized by: ownership of a majority of the total number of votes in the subsidiary or the right to decide on financial policy and ongoing business activities of the subsidiary. With regard to the parent of an associate is characterized by having from 20% to 50% of the votes at the general meeting of the associate.
The main reporting duty of capital group is making of consolidated financial statement based on the financial statements of the group members, as if the group was one unit. If the headquarters, or management of the parent are in the territory of Poland, it is obliged to submit consolidated financial statements including the parent entity and subsidiaries and associates at all levels, regardless of the location of their headquarters.
The report consists of:
- consolidated balance sheet,
- consolidated profit and loss account,
- consolidated statements of cash flow
- additional information, including an introduction to the consolidated financial statements and additional information and explanations
- report on the activities of the group for the fiscal year
In addition, the report must be accompanied by a report of its activities prepared in accordance with legislative requirements.
As a rule, financial statements are prepared at year-end balance sheet, but company can draw it on another day if such obligation under separate regulations.
Exemptions from reporting
A parent company can be exempted from preparing consolidated financial statements if it meets at least two of three conditions:
- the total average annual employment in FTE is not more than 250 people,
- total net revenues from sales of products and goods, and financial operations did not exceed the equivalent of 2 000 000 UER,
- the aggregate balance sheet total does not exceed EUR 7 500 000.
These data must encompass all of its subsidiaries at all levels from the period from the balance sheet of the financial year to the day of the year preceding the fiscal year balance sheet.
Consolidation does not include a non-subsidiary trading company when:
- this unit shares were purchased for resale, within one year from the date of their acquisition,
- there are restrictions on the control of the entity, which exclude free disposal of its assets.
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