A consolidated financial statement can be defined as the financial statements of a parent and its subsidiaries combined to form a single economic entity (AASB 10, 2011). The entity that acquires the other entity is called the parent while the acquired entity is called the subsidiary. Consolidation financial statements arise when an entity purchases another entity and then forms a group. The purpose of preparing consolidated financial statements is to combine the identifiable assets and liabilities (and contingent liabilities) and net assets of two separate entities. At the acquisition date the assets and liabilities are measured at their fair value to ensure that the assets and liabilities are not overvalued. Acquisition analysis includes determining the consideration transferred, goodwill (or deal gain), and fair value of the assets at the acquisition date. When Woolly Ltd purchased Jumper Ltd; they paid more than the consideration transferred (fair value of assets less liabilities) of the entity, so goodwill was provided. Business combination valuation entries occur when the fair value of assets or liabilities differs from their carrying value at the acquisition date. Since Jumper Ltd had assets with a fair value higher than book value; there was a rationale for the BCVR rumors. Intragroup transactions occur through the transfer of assets or liabilities such as stocks or dividends from the subsidiary to the parent company or vice versa (within the group). When Woolly Ltd and Jumper Ltd conduct intra-group transactions, as separate legal entities, these transactions are recorded as normal, however, from the group's perspective, these transactions are internal and therefore not recognized by external users, so the transactions must be deleted . Finally, a minority interest is when the parent company owns less than 100% of the subsidiary, however this is not relevant to Woolly Ltd as Jumper Ltd's ownership is 100%. These steps are necessary: ​​Directors must be able to view the group's financial performance in order to make relevant and informed decisions. To obtain this information you need to follow the correct procedures, as mentioned, to ensure that assets and liabilities are not overstated