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In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into much larger ones.In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.Upon consolidation, the original organizations cease to exist and are supplanted by a new entity.A parent company can acquire another company by purchasing its net assets or by purchasing a majority share of its common stock.
Previously, net income attributable to the noncontrolling interest was generally recorded as an expense or other deduction in calculating consolidated net income.
This type of parent-subsidiary relationship typically comes about as the result of acquisitions or heavy investment by a large corporation in another company.
The accounting methods used to recognize this relationship vary according to the degree of influence exercised by the parent company.
There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company".
Consolidation is the practice, in business, of legally combining two or more organizations into a single new one.