A PDF version of this publication is attached here: Consolidation guide (PDF 3.8mb)
PwC is pleased to offer our Consolidation guide. This guide begins with a summary of the overall consolidation framework. The ensuing chapters discuss the variable interest entity and the voting interest entity models. In addition, this guide discusses the accounting for intercompany transactions in consolidation and other related matters.
This guide summarizes the applicable accounting literature, including relevant references to and excerpts from the FASB’s Accounting Standards Codification (the Codification). It also provides our insights and perspectives, interpretative and application guidance, illustrative examples, and discussion on emerging practice issues.
This guide should be used in combination with a thorough analysis of the relevant facts and circumstances, review of the authoritative accounting literature, and appropriate professional and technical advice.
References to US GAAP
Definitions, full paragraphs, and excerpts from the Financial Accounting Standards Board's Accounting Standards Codification are clearly designated, either within quotes in the regular text or enclosed within a shaded box. In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. The remaining text is PwC's original content.
References to other PwC guidance
This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. References to other guides are indicated by the applicable guide abbreviation followed by the specific section number. The other PwC guides referred to in this guide, including their abbreviations are:
Bankruptcies and liquidations (BLG)
Business combinations and noncontrolling interests (BCG)
Derivative instruments and hedging activities (DH)
Equity method investments and joint ventures (EM)
Fair value measurements (FV)
Financial statement presentation (FSP)
Financing transactions (FG)
Income taxes (TX)
Not-for-profit entities (NP)
SEC volume (SEC)
Stock-based compensation (SC)
Transfers and servicing of financial assets (TS)
Utilities and power companies (UP)
Summary of significant changes
Following is a summary of the noteworthy revisions to the guide since it was last updated. Additional updates may be made to keep pace with significant developments.
Revisions made in September 2023
CG 1, Background on the consolidation framework
  • Section 1.1.3 was updated to reflect the guidance in ASU 2023-05, Business Combinations—Joint Venture Formations, on the accounting by a joint venture entity for contributions received upon formation.
CG 4, Determining whether an entity is a VIE
  • Section 4.3 was updated to reflect the guidance in ASU 2023-05 on accounting by a joint venture entity for contributions received upon formation.
CG 8, Intercompany transactions, proportionate consolidation, and other matters
  • Section 8.3 was updated to reflect the issuance of ASU 2023-05, which is effective for joint venture entities formed on or after January 1, 2025.
This publication has been prepared for general informational purposes, and does not constitute professional advice on facts and circumstances specific to any person or entity. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. The information contained in this publication was not intended or written to be used, and cannot be used, for purposes of avoiding penalties or sanctions imposed by any government or other regulatory body. PricewaterhouseCoopers LLP, its members, employees, and agents shall not be responsible for any loss sustained by any person or entity that relies on the information contained in this publication. Certain aspects of this publication may be superseded as new guidance or interpretations emerge. Financial statement preparers and other users of this publication are therefore cautioned to stay abreast of and carefully evaluate subsequent authoritative and interpretative guidance.
The FASB Accounting Standards Codification® material is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, Norwalk, CT 06856, and is reproduced with permission.
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