Group Cash Flow

Hello,

Could you please explain the idea behind double counting when a subsidiary is acquired? What is the reason we should adjust the figures to avoid double counting.

For example, $’000
Inventory
1. 20×7 = $74,666
2. 20×8= $ 53,019
3. Working capital of A acquired during the year = $4500

Could you please explain how adjusting the inventory by $4500 will avoid double counting?

Thanks