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Consolidation accounting is the process of combining the financial results of several subsidiary companies into the combined financial results of the parent company. This method is typically used when a parent entity owns more than 50% of the shares of another entity.

Definition of consolidation 1 : the act or process of consolidating : the state of being consolidated. 2 : the process of uniting : the quality or state of being united specifically : the unification of two or more corporations by dissolution of existing ones and creation of a single new corporation.

To consolidate (consolidation) is to combine assets, liabilities, and other financial items of two or more entities into one. In financial accounting, the term consolidate often refers to the consolidation of financial statements wherein all subsidiaries report under the umbrella of a parent company.

Unlike with the consolidation method, in using the equity method there is no consolidation and elimination process. Instead, the investor will report its proportionate share of the investee's equity as an investment (at cost).

Debt consolidation is when you roll multiple debts into one loan with one monthly payment and a (hopefully lower) interest rate. This can help you stay organized and possibly save money, especially when you have a pile of debt and it doesn't seem like you're making any progress towards repaying what you owe.

The consolidation method works by reporting the subsidiary's balances in a combined statement along with the parent company's balances, hence consolidated. Under the consolidation method, a parent company combines its own revenue with 100% of the revenue of the subsidiary.

If the company owns more than 20%, it will use the equity method, which reports its share of the firm's earnings. The consolidated method includes all revenue and liabilities, but goes into effect only when a company has a majority interest in the investment.