This is about preparing financial consolidation in accounting. Haven’t done it before? No problem. It’s not that difficult as you think it is. Yet there are some general rules to keep in mind. Here are some basic tips and rules for the beginner.

The point of consolidation is to show the group of companies as a whole. Try to memorize it throughout the process. As a result, the financials should show balances and transactions only with third parties outside of the group.

There’s a good and simple step-by-step guide of consolidation with plenty of examples to follow. I’m not rewriting the steps here once again.

If you think you’re done with your spreadsheet of combining and eliminations, it’s time to check your work. Here are 10 basic and simple things to look at in your file:

Assets = Liabilities and Equity — a very basic rule, but still people are making mistakes in it. It applies for both — standalone and consolidated financials.
Profit in Income Statement = Profit in Financial Position — again, basic rule, but should be checked in both statements (applies to profit belonging to parent company and non-controlling interest separately).
Investments in subsidiary = 0 in consolidated Financial Position statement. After you’re done with eliminations, this balance should be zero (with the assumption that all investments are consolidated).
Owner’s equity of subsidiaries = 0 in consolidated Financial Position statement. That means only parent’s owner’s equity remains.
No negative balances. If you’re eliminating transactions/balances from the right accounts with right amounts, there shouldn’t be any negative balances.
Dividend income from subsidiaries = 0 in consolidated Income Statement. Intra-group transactions should all be eliminated.
Investment Property — pay attention to investment property in standalone statements as they may need a reclassification. Are the rentals earned from group entities? For the group as a whole the property then functions as a PPE item and should be reclassified in consolidation.
Revenues/Expenses vs balances — you eliminated all the intra-group balances: receivables, liabilities, loans, interests etc. What about income statement items? Didn’t you forget any interest income or service expenses?
Eliminations should be equal — it’s easier to find errors or check your work if you use +/- signs for eliminations and verify afterwards that these are in balance.
Goodwill amortization — congratulations if your eliminations are equal! But maybe you forgot to amortize the goodwill (if you’re not consolidating according to IFRS and you need to amortize it according to your local accounting standards).

Hopefully it helps you a bit in this process. If you don’t want to put so much effort and time on consolidation, you should consider using some software solution instead of your spreadsheets. Here are some pros and cons between spreadsheets and software.