Cashflow

Question 1

Subsidiary and associate dividends

Answer 1

Sub:
The part attributable to the parent is ignored as outflow in sub = inflow in parent
But there will be the outflow to NCI

Associate:
Record inflow from associate

Question 2

Indirect method - cashflow proforma

Operating activities

Answer 2

Order - operating, investing, financing

Cashflows from operating activities

Profit before tax - X
Adjustments:
Depreciation - X
Impairment - X
Profit on sale of PPE - (X)
Share of associate / JV - (X)
FX loss - X 
Investment income - (X)
Interest expense - X
Decrease in receivables - X
Decrease in inventories - X
Decrease in payables - (X)
Subtotal = cash generated from operations 
Interest paid - (X)
Income taxes paid - (X)
Total = Net cashflow from operating activities

Question 3

Indirect method - cashflow proforma

Investing activities

Answer 3

Order - operating, investing, financing

Cashflows from investing activities

Acquisition of sub net of cash acquired (same for sale) - (X)
Purchase of PPE/investments - (X)
Proceeds from sale of PPE/investments - X
Interest received - X
Dividends received from associates/JVs/investments - X
Total = Net cash used in investing activities

Question 4

Indirect method - cashflow proforma

Financing activities

Answer 4

Order - operating, investing, financing

Cashflows from financing activities

Proceeds from issue of shares - X
Proceeds from long-term borrowings - X
Payments of lease liability - (X)
Dividends paid (only to owners of parent and NCI) - (X)
Total = Net cash used in financing actives

Combines with operating and investing = net increase in cash and cash equivalents. Plus cash at end of prior period = cash and cash equivalents at end of period

Question 5

NCI dividend calculation (if not given in text)

Same for associate

Answer 5

B/F NCI (BS) + profit attributable to NCI (after tax) less C/F NCI (BS)

For associate use the share of associate in the P&L

Question 6

Ethics

Answer 6

IAS 7 prefers direct method not indirect (indirect is the normal one)

Prefers direct as its info not elsewhere in FS

Direct method not normally used as it would be expensive to maintain