A consolidated annual report (konsolideeritud ) is needed when a group of companies must present financials as one business. This is no longer “filing one OÜ report” — it’s a methodology: eliminate intercompany turnover, align majandusaasta aruanneaccounting policies, and clearly explain the group structure.
If intercompany balances don’t match, consolidation won’t “stick together”. Start with an intercompany transaction register and reconciliations as of year-end — this is the foundation.
Below is when consolidation is needed, what changes in the process, and which reconciliations you should start early to avoid getting stuck in errors at the end.
In practice, before filing, verify the requirements in Accounting Act (RPS) and Commercial Code (ÄS).
When consolidation becomes a question
Common triggers:
- your OÜ has a subsidiary (control/management);
- there are material intercompany loans, services, royalties;
- investors/banks request consolidated group numbers;
- group indicators approach thresholds where an audit/review becomes more likely.
The concrete requirements are set in the Accounting Act (RPS), so the first step is to determine whether you have control and what the group perimeter is.
What really changes in the process
In a standalone report you prepare the balance sheet and P&L of one company. In consolidation you also need:
- reporting from all group companies in a unified format;
- elimination of intercompany balances (one company’s receivable = another’s payable);
- elimination of intercompany turnover (sales inside the group must not inflate revenue);
- consolidation adjustments and disclosures in notes (lisad);
- often an audit/review at the group level.
What to prepare in advance (checklist)
- group chart: who controls whom and in what shares;
- a unified accounting policy (revenue recognition, depreciation, FX rules);
- intercompany transaction register (loans, services, settlements);
- reconciliations of intercompany balances as of year-end;
- currency list and FX rules (if the group is international);
- audit/review (ülevaatus) plan, if applicable.
The most common mistake
Intercompany balances don’t match: one company shows a receivable, the other “forgot” the payable. Until you reconcile this, consolidation is not possible.
Mini timeline to avoid missing deadlines
January: group structure and perimeter.
February–March: collect subsidiary reporting, intercompany reconciliations.
April–May: adjustments, notes, audit.
June: finalization and filing.
How we can help
If you want to close this quickly and avoid refiling: we can review the data, prepare the report in e‑Äriregister, help with documentation and take it to filing. Contact us.
How to define the perimeter: “control” in simple terms
The key question is whether you control another company. A practical check:
- Can you appoint/replace management?
- Do you have the decisive vote in key decisions?
- Do you receive the main part of economic benefits?
If the answer is “yes”, the probability that the company belongs in consolidation perimeter is high.
What is eliminated in consolidation (no academic language)
Elimination of balances
If company A owes company B EUR 20,000, on group level it’s not a liability to the outside world — it’s internal. In consolidated reporting:
- the receivable of A and the payable of B are eliminated against each other.
Elimination of turnover
If A sold services to B for EUR 50,000, it’s not external group revenue. In consolidated P&L:
- intercompany revenue and the corresponding expenses are eliminated.
Adjustments on assets/profit
If assets were sold within the group, additional adjustments may be needed to avoid overstating group profit.
Documents and data that usually “hurt”
- intercompany service/royalty agreements;
- loan agreements and schedules;
- evidence supporting interest/fee rates (so it doesn’t look like profit shifting);
- currency rules and FX differences;
- a unified chart of accounts or account mapping.
If the group is international: currencies and FX
You need clear rules:
- which currency is used for consolidation;
- how you translate figures (closing rate for balance sheet, average rate for turnover, etc.);
- how FX differences are reflected.
Without these rules, consolidation turns into chaos and a dispute with the auditor.
What “good preparation” looks like for an auditor/bank
- a table of intercompany reconciliations (who owes whom and how much);
- an intercompany turnover register;
- a document pack for loan/service terms;
- a written group accounting policy description.
This reduces time and cost of audit/review if one is required.
First-time consolidation plan
- Confirm group structure and control.
- Choose a unified reporting format and account mapping.
- Set monthly intercompany reconciliations (so you don’t do everything at year-end).
- Prepare the first consolidated draft and test eliminations (turnover and balances).
- If an audit is needed, involve the auditor early — not in June.
See also on blog.accres.eu
Consolidation almost always becomes easier in year two if you implemented monthly reconciliations and clear rules. The first year is the most important — and it’s worth doing it right. We can handle the methodology, reconciliations and preparation so your reporting looks like a mature group report, not a set of unrelated spreadsheets.
FAQ
If we have one small subsidiary, is consolidation always mandatory?
Not always. It depends on control criteria and legal requirements/category. But it’s best to assess consolidation need early, before year-end close.
Can we do consolidation in Excel?
Technically yes, but the risk of errors is high. You need rules (group accounting policy) and regular intercompany reconciliations, otherwise the numbers will drift.
If there are almost no intercompany transactions, can we simplify?
You can keep it shorter, but “almost none” still needs evidence: transaction register and balance reconciliations remain — they are just smaller.
Do we need to publish the consolidated report?
If consolidation is required by the rules and your group category, the consolidated report becomes part of annual reporting and is published via the register. Related topic: top accounting mistakes for small business.