This work analyzes the topic of business mergers and consolidation of financial reports. There are many reasons and benefits that cause the merger of the company to grow and gain faster access to new markets. With an explanation of the general terms of business mergers, the types and strategies of business mergers are listed, and the framework for accounting for business mergers according to MSFI 3 and HSFI 2 is processed. The Goodwill is a very important part of any business merger as it results as the difference between the consideration transferred and the fair value of the company. Namely, goodwill can be positive or negative. Goodwill is the accounting standards used by the company, or whether the company uses MSFI or HSFI. Further, for the sake of easier understanding of the work, the consolidation balance sheet of the ABC d.d group is presented on the day of business merger. Consolidation is based on the financial reports of the ruling ABC d.d. and subsidiary EFG d.d. In the preparation of consolidation financial reports the subject of elimination is internal realization. Therefore, at the end of the work, there are some examples of elimination of internal realization.