Consolidated Financial Statements in France 2026: Methods, Legal Requirements and Timeline

In 2026, consolidated financial statements are required from any company that exclusively or jointly controls other undertakings (Article L233-16 of the French Commercial Code). A group is exempt as long as it stays below two of three thresholds (EUR 30M balance sheet, EUR 60M turnover, 250 employees) over two consecutive years. Default framework: ANC 2020-01, or IFRS if listed.

Last updated: 18 July 2026. Reviewed by Samuel Hayot, expert-comptable, Paris

A group can be profitable entity by entity while hiding a consolidated debt burden out of all proportion, artificial inter-company margins, or an undervalued goodwill. This is precisely why consolidation exists: it aggregates, restates and reconciles to give directors, lenders and investors a faithful picture of the group's economic reality as a whole.

In 2026, the rules remain those of the French Commercial Code (Art. L233-16), ANC Regulation 2020-01 for unlisted groups (it replaced the former CRC 99-02, now only a historical reference), and IFRS 10, 11 and 12 for companies listed on a regulated EU market. This article covers the legal obligations, the three consolidation methods, their key differences and the operational process : illustrated with three practical scenarios.

Article L233-16 of the French Commercial Code#

The obligation to publish consolidated accounts is established by Article L233-16 of the French Commercial Code. It applies to any commercial company that exercises exclusive or joint control over one or more other entities, provided the group exceeds, over two consecutive financial years, two of the three dispensation thresholds of Article L233-17 of the French Commercial Code:

• Consolidated total balance sheet: EUR 30 million
• Consolidated net turnover: EUR 60 million
• Average headcount: 250 employees

These thresholds were raised by Decree 2024-152 of 28 February 2024 (transposing Delegated Directive (EU) 2023/2775) for financial years beginning on or after 1 January 2025. Below these thresholds, an exemption from consolidation may apply (a sub-group exemption also exists, Article L233-17-1, for a subsidiary already consolidated at a higher level). This does not, however, relieve the CEO of a need for a consolidated view for internal management or bank financing purposes.

Listed Groups: IFRS Mandatory#

Any company whose securities are admitted to trading on a regulated EU market must prepare its consolidated financial statements under IFRS (EC Regulation 1606/2002). All other groups use ANC Regulation 2020-01 (French GAAP for groups, ratified by the order of 29 December 2020 and applicable to financial years beginning on or after 1 January 2021, replacing CRC 99-02) unless they have voluntarily opted for IFRS.

The consolidation method applied to each entity depends directly on the type of control exercised.

Exclusive Control#

Control is exclusive when the parent holds more than 50% of the voting rights, or when it has the power to appoint or remove the majority of governing bodies, even with a lower percentage. This is the most common situation in standard holding structures.

Joint Control#

Control is joint when strategic decisions require the unanimous agreement of the parties sharing control. Two shareholders at 50/50, or a shareholders' agreement with mutual veto rights over major decisions, generally characterise this situation.

Significant Influence#

Significant influence is presumed when a company holds between 20% and 50% of the voting rights in another entity. It may also result from participation in governance bodies without a voting majority.

Full Integration#

Full integration means incorporating line by line all assets, liabilities, income and expenses of the subsidiary into the consolidated accounts, regardless of the ownership percentage. The share attributable to minority shareholders (non-controlling interests under IFRS) is isolated in equity and in the profit allocation.

This method applies to wholly-owned or majority-held subsidiaries.

Proportional Consolidation (French GAAP Only)#

Under ANC 2020-01, when control is joint, the company may use proportional consolidation: only the share corresponding to the ownership percentage of each line item is integrated. A 50/50 joint venture will contribute half of its balance sheet and income statement to the consolidated accounts.

Under IFRS, IFRS 11 has eliminated this method for joint ventures. Only the equity method is permitted for joint ventures as defined by IFRS 11, which structurally changes the leverage ratios presented.

Equity Method#

The equity method does not consolidate line items. Instead, the carrying value of the investment on the parent's balance sheet is replaced by the group's proportionate share of the entity's net assets, updated at each closing. A single line "Equity-accounted investments" appears in assets, and the share of profit is recognised in the consolidated income statement.

This method applies to entities under significant influence (20-50%) and, under IFRS, to all joint ventures.

Goodwill Treatment#

This is the most visible difference between the two frameworks. Under ANC 2020-01, goodwill is amortised over its useful life; where that life cannot be reliably estimated, it is amortised over 10 years, and where the useful life is not limited it is not amortised but tested for impairment at least annually. Under IFRS (IFRS 3), goodwill is never amortised: it is subject to an annual impairment test under IAS 36.

Direct consequence: a group under French GAAP shows a consolidated result systematically reduced by goodwill amortisation, while the same group under IFRS preserves its result : unless an impairment is recognised.

Proportional Consolidation#

ANC 2020-01 keeps proportional consolidation for jointly controlled entities; IFRS 11 replaces it with the equity method.

Lease Accounting#

Under ANC 2020-01 (financial years beginning on or after 1 January 2021), activating finance leases and similar contracts in the lessee's consolidated accounts became mandatory (it was a preferential method under the former CRC 99-02). Under IFRS 16, all significant lease contracts must be recognised as right-of-use assets and lease liabilities : mandatory : which mechanically inflates the balance sheet total and gross debt.

Pension Obligations#

Under ANC 2020-01, recognising pension obligations (end-of-career indemnities, defined benefit plans) as a provision in consolidated accounts remains optional: where no provision is booked, notes disclosure suffices. Under IAS 19 (IFRS), recognition as a provision is mandatory, using actuarial assumptions to discount future cash flows. The impact on consolidated equity can be significant for groups with large workforces.

In short, four treatments separate French GAAP from IFRS and directly affect consolidated profit and equity:

These are standard reference timeframes. Listed companies face stricter requirements from the AMF and the EU Transparency Directive: the annual financial report (annual accounts, consolidated accounts, auditors' reports) is published within 4 months of closing, and the half-year report within 3 months.

Article L821-53 (paragraph 2) of the French Commercial Code requires that the statutory auditor (commissaire aux comptes) of the parent company certifies the consolidated financial statements. In groups with several significant subsidiaries, subsidiary auditors transmit their work (review letters, questionnaires, confirmations) to the group auditor, who supervises and bears final responsibility for certification.

The consolidated audit process covers:

1. Review of consolidation scope and methods
2. Verification of pre-consolidation restatements (uniform accounting policies)
3. Control of inter-company eliminations
4. Review of minority interest calculations
5. Goodwill review and impairment test examination
6. Review of disclosures (IFRS 12 or ANC 2020-01 notes)

Consolidation Pack#

The group sends subsidiaries a standardised consolidation pack containing: the reporting package of individual accounts restated under group policies, the inter-company transaction schedule (receivables, payables, dividends, internal disposals), and off-balance-sheet commitments. The quality and consistency of these packs directly determines the reliability of the final consolidated accounts.

Pre-Consolidation Restatements#

Before aggregating accounts, each entity must align its accounting policies with those of the group: depreciation periods, inventory valuation methods, lease treatment, provisions for risks. These restatements are performed in transition schedules from local GAAP to group rules : not in the statutory accounts.

Elimination of Inter-Company Transactions#

This is the most technically sensitive step. It involves:

• Eliminating reciprocal receivables and payables between group entities
• Eliminating inter-company sales and purchases (revenue and expenses)
• Neutralising internal gains on asset disposals between entities
• Eliminating dividends paid by subsidiaries to the parent

A missed elimination can artificially inflate consolidated revenue or distort equity.

Minority Interest Calculation#

For each subsidiary consolidated using the full integration method but not 100% owned, the share of equity and profit attributable to third-party shareholders is calculated and presented separately.

Technical points often overlooked#

The most widely used solutions in 2026 among mid-market groups and ETIs:

• Cegid Consolidation: French-built solution integrated with the Cegid ecosystem
• CCH Tagetik (Wolters Kluwer): strong on restatement automation, positioned for mid-caps and large groups
• Lucanet: widely used in France, recognised for inter-company management
• SAP (BFC, ex-Cartesis, and Group Reporting): historically widespread, with BFC now a legacy solution nearing end of life
• Oracle FCC (Financial Consolidation and Close): on the Oracle EPM ecosystem
• Workiva: statement production and regulatory reporting

Tool selection should be driven by number of entities, restatement complexity, reporting framework (ANC 2020-01 or IFRS) and available internal resources.

Scenario 1: Holding + 3 Wholly-Owned Subsidiaries : Full Integration#

A Paris-based holding owns three subsidiaries at 100% in consulting, real estate and IT. The group exceeds the L233-16 thresholds.

Method: full integration for all three subsidiaries. No minority interests to calculate. The main complexities are eliminating management fee invoices between the holding and subsidiaries, neutralising internal rent recharges, and harmonising depreciation periods.

Key risk: management fees not yet settled at year-end create reciprocal receivables/payables that must be eliminated in full. A partial miss here is one of the most frequent errors in this type of group structure.

Scenario 2: Industrial Group with a 50/50 Joint Venture#

A manufacturing group holds 50% of a joint venture alongside an industrial partner. Both shareholders exercise joint control formalised in a shareholders' agreement.

Under French GAAP (ANC 2020-01): proportional consolidation : 50% of the JV's assets, liabilities, income and expenses are consolidated. Consolidated revenue and debt reflect this share.

Under IFRS: IFRS 11 qualifies this entity as a joint venture and requires the equity method. The JV disappears from the detailed balance sheet and income statement; only the carrying value of the investment (adjusted for the share of profit) appears as an asset. Consolidated revenue is lower, but margin ratios are often improved.

Trade-off: if the group targets a listing or international fundraising, the IFRS equity method gives a more rigorous read. In a French banking context, proportional consolidation under CRC 99-02 is often better understood by local credit institutions.

Scenario 3: Patrimonial Holding with a 25% Stake in a Third-Party SME#

A family holding holds 25% of a regional SME without a seat on its board.

Method: equity method (presumption of significant influence at 20-50%). The carrying value of the shares is replaced by the proportionate share of the SME's net assets, updated at each close. The share of profit is recognised as financial income in the consolidated accounts.

In practice: if the holding holds no representation in the SME's governing bodies and exercises no real influence over its financial or operational policies, the "significant influence" qualification may be challenged. The situation should be carefully documented in conjunction with the statutory auditor.

The underestimated risk: inter-company elimination is rarely 100% automated, even with the best tools. In groups that have grown rapidly : through acquisition or successive subsidiary creation : inter-entity flows are often poorly documented or partially traced across accounts that do not mirror each other. A 5% elimination gap on EUR 10 million in inter-company purchases represents EUR 500,000 of impact on consolidated profit: a qualification risk at audit.

Our assessment: consolidation is not a purely accounting year-end exercise. It is a management tool. Groups that use it to produce monthly or quarterly consolidated statements : even simplified ones : make better resource allocation decisions across entities, identify cash-stressed subsidiaries earlier, and present banks with data consistent with the certified annual accounts.

What we recommend: formalise the consolidation pack from the second entity in the group. Even below the legal thresholds, a quarterly management consolidation substantially simplifies the production of annual certified accounts and reduces audit costs.

• Dispensation thresholds (Art. L233-17): EUR 30M total balance sheet, EUR 60M net turnover, 250 employees, over two consecutive financial years, set by Decree 2024-152 of 28 February 2024 for financial years beginning on or after 1 January 2025.
• IFRS 16 under ANC 2020-01: some French GAAP groups voluntarily adopt IFRS 16 treatment for consolidation restatements; ensure consistency with the documented group policy.
• Impairment test: under IFRS, the goodwill impairment test must be performed at least once a year and whenever there is an indicator of impairment. Do not confuse this with simple monitoring of net book value.
• Accounting consolidation vs tax consolidation: accounting consolidation (Art. L233-16) and the French tax consolidation regime (Art. 223 A of the Tax Code) are two distinct regimes. A group may be consolidated for accounting purposes without opting for tax grouping.

Two regimes never to confuse: accounting consolidation (Art. L233-16) gives an economic view of the group, while tax consolidation (Art. 223 A of the Tax Code) optimises corporate income tax. Their scopes do not coincide.

• Verify L233-16 threshold exceedance for the current year
• Define or confirm the consolidation scope (included, excluded entities, method per entity)
• Choose the framework: ANC 2020-01 or IFRS
• Send consolidation packs to subsidiaries by D+30
• Harmonise accounting policies (pre-consolidation restatements)
• Identify and document all inter-company transactions
• Perform eliminations (receivables/payables, sales/purchases, dividends, internal gains)
• Calculate minority interests by entity
• Calculate or test goodwill (ANC 2020-01 amortisation or IFRS impairment test)
• Prepare disclosures (IFRS 12 or ANC 2020-01 notes)
• Submit workpapers to the group's statutory auditor
• Meet the approval and filing calendar

Cabinet Hayot Expertise, based in Paris, supports groups and holding companies in structuring and producing their consolidated financial statements. Our involvement covers scope definition, framework selection, consolidation pack design, pre-consolidation restatements and preparation of accounts for audit.

For groups that do not yet have an in-house finance director, our outsourced CFO (DAF externalisé) service includes supervision of quarterly management consolidation and production of accounts for governance bodies.

This article is for information purposes only. Defining the consolidation scope, choosing the reporting framework and performing the necessary restatements require analysis of your specific structure, shareholders' agreements and the rules in force at your closing date. We invite you to contact us for a diagnostic tailored to your group.

Sources: Légifrance Art. L233-16, L233-17 and L821-53 of the French Commercial Code; ANC Regulation 2020-01 (order of 29 December 2020, ANC); IFRS 10, 11, 12 and IFRS 3 (IFRS Foundation). Current as at 18 July 2026.