Chapter 16 - Group Cash Flow Statement

Question 1

Geoup Cash Flows

Answer 1

Showing 100% of the cash flows that the group controls

Question 2

Cash flow Treatment of Associates

Answer 2

Only dividends received from the Associate are shown in the consolidated cash flow statement

Question 3

Treatment of foreign exchange differences from overseas operations

Answer 3

Theses are NOT cash and must not be included in the cash flow statement

Question 4

Treatment of Dividend payments

Answer 4

Include ONLY dividends paid by the parent

Dividends from subsidiary are intra-group

Question 5

Group cash flow and dividends

Answer 5

Include only payments outside the group

Question 6

Group cash flows and subsidiary acquisition

Answer 6

Include cash elements only
> Amount paid
> Subsidiary’s cash gained upon purchase
> Cash in and out of the Subsidiary after purchase

Question 7

Adjustments to Operating Activities

Answer 7

> Add back Finance costs
Add back Share of Associate’s profits, what must be included is Cash dividends from associates
Add back Depreciation
Add back any Provisions
Add back any Goodwill amortized during the year
Add back any gain/loss on disposal of non-current assets

Question 8

Changes in working capital

Answer 8

Inventory - (increase) / Decrease
Receivables - (increase) / Decrease
Payables - increase / (Decrease)

Question 9

Inventory adjustments

Answer 9

Inventory - b/f X
Inventory via Acquisition X
Difference. C
Inventory c/f. X

Inventory (Increase/Decrease). C
Fex gain/(loss)
Net Change in Inventory

Question 10

Receivables adjustments

Answer 10

Receivables - b/f X
Receivables via Acquisition X
Difference. C
Receivables c/f. X

Receivables (Increase)/Decrease C
Fex gain/(loss)
Net Change in Receivables

Question 11

Consolidated cash flows: Associates

Answer 11

All cash flows between a group and an associate are cash flows from investing Activities

Associate is classed as an investment

Question 12

Consolidated cash flows: Associates

Answer 12

Cash flows:
> Inflows: Dividend received
> Outflows: Trading Activities and Change in Investment

Question 13

Consolidated cash flows: Associates

Only included when?

Answer 13

• Cash dividends received
• Loans made
• Loans repaid

Question 14

Cash flow from operating activities in a consolidated statement of cash flow

Answer 14

> dividend paid to non-controlling interest

> share of associate profit for the year