The paper deals with the theoretical and normative aspects of the concept, procedure and the process of consolidation of the financial statements. With an elaboration of the international professional framework, the focus of the paper is placed on the application of national regulations and the Croatian financial reporting standards in the process of consolidation. Accounting Law defines that the Consolidated annual financial statements are financial statements of a group of entrepreneurs in which a particular entrepreneur (the parent company) over one or more of the entrepreneur (subsidiary) has a dominant influence (control) on the the determination of financial and business policies, and portrayed the group as a whole. Application part of the work consists of a display of consolidation procedures the Group Company which consists of eleven companies whose Parent company has its headquarters in the Republic Croatia. Consolidated financial statement of the group is stated for the fiscal year 2017. Since article 23. in paragraph 2. of the Accounting Law provides that a consolidated annual financial statements is obliged to compose an entrepreneur from the Republic Croatia who in the Group of entrepreneurs representing the parent company, described the consolidated financial statements are prepared according to the Croatian Accounting standards 2. who prescribes the terms of consolidation, consolidation methods, terms of cessation of consolidation and the content of the published consolidated financial statements. This standard also specifies the format and content of the consolidated financial statements, so that they consist of the consolidated balance sheet, consolidated income statement, consolidated cash flow statement, consolidated statement of changes in capital and notes of the reports. The paper, except the summary view of the individual financial statements of each Member of the group, also displayed the procedures and methods of elimination of mutual transactions and merge into one consolidated report.