10.2. Consolidation
All subsidiaries of the PKO Bank Polski S.A. Group are consolidated using the acquisition method. The process of consolidation of financial statements of subsidiaries under the acquisition method involves adding up the individual items of the income statements and statements of financial position of the parent company and the subsidiaries in the full amounts, and making appropriate consolidation adjustments and eliminations. The following items are eliminated in full on consolidation:
- the carrying amount of the Bank’s investments in subsidiaries and the equity of these entities at the date of their acquisition;
- inter-company receivables and payables and other settlements between consolidated entities of a similar nature;
- revenues and costs resulting from inter-company transactions between consolidated entities;
- profits or losses resulting from inter-company transactions between consolidated entities contained in the value of the consolidated entities’ assets, except for impairment losses;
- dividends accrued or paid by subsidiaries to the parent company and other consolidated entities;
- inter-company cash flows in the statement of cash
The consolidated statement of cash flows is prepared on the basis of the consolidated statement of financial position, consolidated income statement and additional notes and explanations.
Financial statements of subsidiaries are prepared for the same reporting periods as the financial statements of the parent company. Consolidation adjustments are made in order to eliminate any differences in the accounting policies applied by the Bank and its subsidiaries.