Asked by Najia Calhoun on Jun 07, 2024
Verified
In preparing a consolidated statement of cash flows,what items can be shown on a net cash flow basis?
Consolidated Statement
A financial statement that aggregates the financial position and operating results of a parent company and its subsidiaries.
Net Cash Flow
The total amount of money being transferred in and out of a business, especially as it relates to operational, investing, and financing activities.
- Determine the effects of specific transactions on cash flow statements, including acquisitions and disposals.
- Understand how non-cash transactions are treated and disclosed in the cash flow statement.
Verified Answer
BG
Brittney GoodeJun 14, 2024
Final Answer :
Net cash flow basis items:
- AASB 107 generally requires items to be disclosed on a gross cash flow basis; there are two criteria:
o On behalf of customers
o Quick turnover,short maturity
However,in acquiring a subsidiary,a net cash flow basis is required so that the closing cash balance in the statement of cash flows will reconcile with the cash position in the consolidated statement of financial position.
- AASB 107 generally requires items to be disclosed on a gross cash flow basis; there are two criteria:
o On behalf of customers
o Quick turnover,short maturity
However,in acquiring a subsidiary,a net cash flow basis is required so that the closing cash balance in the statement of cash flows will reconcile with the cash position in the consolidated statement of financial position.
Learning Objectives
- Determine the effects of specific transactions on cash flow statements, including acquisitions and disposals.
- Understand how non-cash transactions are treated and disclosed in the cash flow statement.
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