KPMG Handbook: Consolidation Accounting in US GAAP May 2022

Using Q&As and examples, KPMG provides interpretive guidance on consolidation-related accounting issues in applying ASC 810. This May 2022 edition incorporates updated guidance and interpretations.


  • Companies that present consolidated financial statements
  • Companies with interests in variable and/or voting interest entities

Relevant dates

  • Effective immediately

Challenging and sometimes perplexing

Consolidated financial statements are presumed to be more meaningful than separate statements – based on the foundational principle that consolidated statements are usually needed for a fair presentation when one company controls another.

This presumption and foundational principle were established in 1959, and while the basic principles endure, today’s consolidation analysis has evolved dramatically since then. Sweeping changes in 2003 introduced the variable interest entity consolidation model, and 2007 brought highly anticipated guidance on accounting for noncontrolling interests.

The judgments about what it means to have a controlling financial interest and how consolidated financial statements are prepared have become increasingly challenging and sometimes perplexing.

This Handbook provides an in-depth look at consolidation and consolidation procedure. It guides you through some of the most complex literature in US GAAP and provides insight and examples to assist you in making the critical judgments necessary to execute on the principles of consolidation.

Report contents

  • Scope
  • What is a variable interest?
  • What is a variable interest entity?
  • Who consolidates a voting interest entity?
  • Who consolidates a variable interest entity?
  • Consolidation and deconsolidation procedures
  • Presentation and disclosure
  • Not-for-profit entities, entities controlled by contract, combined and parent-only financial statements
  • Expected losses and expected residual returns

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