This document discusses the process for preparing consolidated financial statements for a holding company and its subsidiaries. It defines a holding company and subsidiary. It explains that a holding company must attach financial statements of subsidiaries to its balance sheet and prepare a consolidated balance sheet combining its accounts with those of its subsidiaries. The summary outlines the 7 steps to prepare a consolidated balance sheet, including calculating ownership ratios, pre-acquisition and post-acquisition profits, minority interest, goodwill/capital reserve, adjusting for unrealized profits and intercompany balances.