The consolidated financial statements of General Electric Company (GE) combine the industrial manufacturing and services businesses of GE with the financial services businesses of General Electric Capital Corporation (GECC). GE is the parent company of GECC. Because of the diverse nature of the businesses reflected in the operations of GE and GECC, GE presents its financial statements in two formats—a fully consolidated format (including the results of GE, GECC, and all other majority-owned entities) and a partially consolidated format (excluding the results of GECC). In GE’s partially-consolidated financial statements, the investment in GECC is accounted for using the equity method.

a. Presented below are the partially consolidated income statements and balance sheets for GE and GECC for 2015. Do you think the 2015 fully consolidated statements for GE would include all of the amounts provided in each account presented?

b. Go to www.ge.com and review the company’s 2015 consolidated statements. What significant differences do you notice about GE’s financial statements on a partially consolidated basis versus a fully consolidated basis?

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($ millions) Revenues Sales of goods. Statement of Earnings For the years ended December 31 GE GECC 2015 2015 Sales of services Other income GECC earnings from continuing operations GECC revenues from services. Total revenues... Costs and Expenses Costs of goods sold. 74,565 79 31,641 0 2,165 0 (7,672) 0 0 10,722 100,700 10,801 59,970 69 Cost of services sold 20,858 2,273 Selling, general and administrative expenses 14,914 3,512 Interest and other financial charges.. 1,706 2,301 Investment contracts, insurance losses and insurance annuity benefits. 0 2,737 Other costs and expenses. 0 2,647 Total costs and expenses.. 97,447 13,539 Earnings from continuing operations before income taxes Benefit (provision) for income taxes.. 3,252 (2,739) (1,506) (4,979) Earnings from continuing operations before accounting changes. Earning (loss) from discontinued operations, net of taxes. 1,746 (7,718) (7,807) (7,485) Net earnings (loss).. $ (6,061) $(15,202)