What is a unconsolidated balance sheet?

Answer 1

When there is parent subsidiary relationship exists and in that case if separate financial statements are prepared by both parent and subsidiary company those statements are called unconsolidated statements.

Answer 2

When a company acquires a controlling interest in another company (i.e., >50%), it is required under Generally Accepted Accounting Principles for the parent company to consolidate financial statements with its subsidiary company. However, each company also maintains its own unconsolidated financial statements. At the end of the accounting period, the financial statements are combined.

Answer 3

The unconsolidated financial statements are the stand-alone financial statements of a company.

On the stand-alone financial statements investments in group companies are shown as a line item on the balance sheet ('subsidiaries'), as well as on the income statement (profit in subsidiaries).

In the group statements, the underlying assets and liabilities of the subsidiaries are added with the assets and liabilities of the parent. (same for the income statement: the revenues and expenses of the subsidiaries are added to those of the parent).

In sum: the stand-alone financial statements are for the parent by itself (considered a single legal entity). The group statements consider the group as one, and show the financial statements of the whole group (considered one entity in an economic sense).

The difference is relevant for companies that hold shares in subsidiaries.