Operations · Group

Group report consolidation (parent–subsidiary): common pitfalls

Short answer

Producing reports for a parent–subsidiary group demands consistent reporting boundaries between financial and non-financial information. The most common pitfalls: inconsistent entity boundaries, un-eliminated intercompany transactions, treatment of non-controlling interests, and, for sustainability, an ESG data boundary that differs from the financial boundary. Setting the boundary early prevents mismatches.

Four risk areas

Area	Risk
Entity boundary	Subsidiaries entering/leaving consolidation treated inconsistently across report sections.
Intercompany transactions	Intra-group revenue/expense not eliminated, causing double counting.
Non-controlling interests	Minority ownership share misstated.
ESG data boundary	Sustainability data coverage (e.g., emissions) differs from the financial consolidation boundary.

How to avoid them

Set one boundary definition and apply it consistently across the report.
Align sustainability data periods and entities with the consolidated financial statements.
Document consolidation assumptions and mid-year group-structure changes.
Reconcile narrative, tables, and financial statements before finalization.

For PSPK (effective 2027), the connectivity of sustainability data with financial statements makes consistent group boundaries even more important, the ESG boundary should follow the financial consolidation logic.

Frequently asked questions

What is the most common consolidation pitfall?

Inconsistent entity boundaries across report sections and un-eliminated intercompany transactions are the two most common, producing double or mismatched figures.

Should the ESG data boundary match the financial boundary?

Ideally aligned. If they differ (e.g., due to data availability), the difference must be clearly stated so readers don't misinterpret.

How do I handle mid-year group-structure changes?

Document when subsidiaries enter/leave consolidation and apply it consistently; explain the impact on comparability.

Why does consolidation matter more approaching PSPK?

Because PSPK emphasizes connectivity between sustainability data and financial statements, consistent group boundaries become a disclosure-quality requirement.

Official sources

Consolidation accounting standards (PSAK on consolidated financial statements).
SEOJK 16/SEOJK.04/2021 (issuer annual report presentation).
PSPK 1 & 2, IAI Sustainability Standards Board (connectivity of sustainability data with financial statements).
Official references: OJK · IAI (DSK)

Producing a consistent group report?

SAMCGI prepares annual and sustainability reports for issuer and SOE groups, keeping boundary, narrative, and data consistent across entities. We prepare the discipline, not promise outcomes.

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Compiled June 2026 from official sources. Regulations and practices evolve; verify the latest OJK/IDX/IAI/KNKG provisions before making decisions. This page is informational, not legal or accounting advice.