The Adoption of Consolidated Accounting in Great Britain

Existing literature suggests that the principle of consolidated accounting gained widespread acceptance in Britain during the 1930s. The study reveals that there was little use of consolidated accounting in practice prior to 1945. The prolonged divergence between practice and opinion as to best practice is discussed with reference to both the divorce of ownership from control and the changing perceptions of the nature of shareholders. Finally the widespread adoption of consolidated accounting prior to the Companies Act 1948 is discussed with reference to the impending legislation to enforce group accounting, changing perceptions of the social obligations associated with corporate accounting and several specific events in the corporate environment that may have created incentives to provide consolidated accounts.