Asked by Maryam Ahsan on Jun 12, 2024
Verified
Discuss the treatment of subsidiaries acquired and disposed of in the consolidated statement of cash flows.
Subsidiaries Acquired
Refers to companies that have been bought and are now controlled by a parent company, becoming part of a larger corporate family.
- Ascertain the impacts of particular transactions on cash flow statements, such as acquisitions and disposals.
Verified Answer
GP
Glory PhilipJun 15, 2024
Final Answer :
Treatment of subsidiaries acquired and disposed of:
- Important items to be disclosed in a consolidated statement of cash flows include cash flows relating to gaining or losing control of a subsidiary.
- A double-counting issue arises when a subsidiary is acquired for cash,in relation to whether the statement of cash flows should show the cash flow from acquiring the subsidiary or acquiring its assets.
- AASB107 requires the disclosure of the cash flow as acquisition of the subsidiary.
- Important items to be disclosed in a consolidated statement of cash flows include cash flows relating to gaining or losing control of a subsidiary.
- A double-counting issue arises when a subsidiary is acquired for cash,in relation to whether the statement of cash flows should show the cash flow from acquiring the subsidiary or acquiring its assets.
- AASB107 requires the disclosure of the cash flow as acquisition of the subsidiary.
Learning Objectives
- Ascertain the impacts of particular transactions on cash flow statements, such as acquisitions and disposals.
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