what is consolidation 
consolidation in technical analysis refers to an asset oscillating between a well defined pattern of trading levels consolidation is generally interpreted as market indecisiveness which ends when the asset s price moves above or below the trading pattern in financial accounting consolidation is defined as a set of statements that presents consolidates a parent and subsidiary company as one company understanding consolidationperiods of consolidation can be found in price charts for any time interval and these periods can last for days weeks or months technical traders look for support and resistance levels in price charts and then use these levels to make buy and sell decisions a consolidation pattern could be broken for several reasons such as the release of materially important news or the triggering of a succession of limit orders consolidation support vs resistancethe lower and upper bounds of an asset s price create the support and resistance levels within a consolidation pattern a resistance level is the top end of the price pattern while the support level is the lower end once the price breaks through the identified areas of support or resistance volatility quickly increases and so does the opportunity for short term traders to generate a profit technical traders believe a breakout above resistance means the price will climb further so the trader buys on the other hand a breakout below the support level indicates the price is falling even lower and the trader sells accounting consolidationin financial accounting consolidated financial statements are used to present a parent and subsidiary company as one combined company a parent company may own a majority percentage of a subsidiary with a non controlling interest nci owning the remainder or the parent may own the entire subsidiary with no other firm holding ownership to create consolidated financial statements the assets and liabilities of the subsidiary are adjusted to fair market value and those values are used in the combined financial statements if the parent and nci pay more than the fair market value of the net assets assets minus liabilities the excess amount is posted to a goodwill asset account and goodwill is moved into an expense account over time a consolidation eliminates any transactions between the parent and subsidiary or between the subsidiary and the nci the consolidated financials only includes transactions with third parties and each of the companies continues to produce separate financial statements example of accounting consolidationassume xyz corporation buys 100 of the net assets of abc manufacturing for a price of 1 million and the fair market value of abc s net assets is 700 000 when an accounting firm puts together the consolidated financial statements abc s net assets are listed with a value of 700 000 and the 300 000 amount paid above the fair market value is posted to a goodwill asset account 