Can anyone tell why consolidated financial statements important when purchase differential is large?

Answer by  rupmala (6)

Because they can be manipulated to hide financial problem.It is extemely difficult to ascertain from these statements whether there are hidden problems and exactly where they are.Because growing companies often purchase smaller companies which had comparitively niches through their product and services to attract customer and investor.

Answer by  Hasan72 (572)

Consolidated financial statements is a combined statement of parent company and subsidiary company and purchase differential refers to the difference between the price paid for another company, and the net book value of its assets and liabilities. If the purchase differential is large than the book value of total stockholders equity will decrease.

Answer by  Rani60 (351)

Purchasing differential large items consolidated financial statements is very important, because we purchase many items and understand the net income of different head.