PRACTICE KIT

CFAP 1: ADVANCED ACCOUNTING AND FINANCIAL REPORTING

CHAPTER 20: CONSOLIDATION CASH FLOWS

Less : Closing balance on 30 June 2016 (5,488) (4,659) (1,500) (18,050)

Working capital changes (155) (502) (200) 1,060

9. Malik Group of Companies (Disposal + Acquisition)

Consolidated statement of cash flows
For the year ended 31 December 2014

Cash flows from operating activities Workings Rs. in

Million
Profit before tax 11,150
Adjustments for.
Finance cost 350
Gain on sale of subsidiary (1 000)
Income from associate (1 150)
Goodwill impairment 1 800
Gain on disposal of PPE (Rs. 2, 750m - Rs. 2,500m) (250)
Depreciation 3,850
Working capital changes
Increase in inventory 2 500
Decrease in receivables 2 300
Decrease in payable 2 (250)
Cash generated from operations 13,300
Finance cost paid (Rs.75m + Rs. 350m – Rs. 125m) (300)
Income tax paid 3 (1,850)
Net cash generated from operations 11,150
Cash flow from investing activities
Acquisition of property plant and equipment (8,000)
Acquisition of a subsidiary (Rs. 15,00m – 800m) (14,200)
Process from disposal of property , plant and equipment 2,750
Proceed from disposal of a subsidiary (Rs. 8,500m – Rs. 8,000
500m) 850
Dividend received from associate
(10,600)
Cash flow from financing activities
Increase in long term loan (Rs. 31000m + Rs. 400m - Rs. 300 1,900
- Rs. 5,000m) (1,250)
Dividend paid to parent shareholders (500)
Dividends paid to non-controlling interest
150
Opening cash and cash equivalents 700
Increase in cash and cash equivalents 1,400
Closing cash and cash equivalent 2,100

WORKINGS
W1: Goodwill impairment
Goodwill as on 1 January 2014 18,500
Add: Goodwill of subsidiary acquired during the year 1.1 3 500
Less: Goodwill of subsidiary disposed of during the year 1.1 (1,900)
Less: Goodwill as on 31 December 2014 (19,300)
Impairment (balancing figure) 800

From the desk of Hassnain R. Badami, ACA

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