Associate in the consolidated cash flow statement
In the investor’s consolidated cash flow statement, include cash flows between the investor and the associate, such as dividends and investment or disposal cash flows, in the appropriate IAS 7 categories. Remove the non-cash share of the associate’s profit from an indirect operating-cash reconciliation where it is included in the starting profit. Do not add the associate’s own gross cash receipts and payments as if it were a subsidiary.
Worked example
A group recognises $30,000 as its share of an associate’s profit and receives a $10,000 dividend. If the starting subtotal already excludes that share of profit, do not deduct it again in the indirect operating reconciliation. Show the $10,000 dividend received separately in the category required by the applicable IAS 7 rules.
Common mistake
Combining the associate’s total operating cash receipts and payments line by line into group cash flows or treating the share of profit as cash received.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBR | Direct | September 2026–June 2027 |