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Associate Profit in Cash Flow Stmt

GGavin9y ago
Hi, Just looking through March/June paper for 2016 and wondering what is the thought process behind reducing operating activities by the profit from associate? Tks, Gavin
P2-D2P2-D2Tutor9y ago#1
Hi, It is because it is a non-cash adjustment. It has increased the profit in the group accounts but it has not increased cash so it is therefore removed, and the cash aspect (dividend received from associate) is then dealt with elsewhere. It's similar to the profit on disposal on an item of PPE, where we remove the non-cash profit and deal with the cash inflow from the sale separately. Thanks
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