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Hello,
In consolidated cash flows, when there is acquisition of subsidiary, why do I deduct the inventory, receivables and creditors of subsidiary? Are these included in the balance sheet of the reporting year?
Thanks,
MariaWhen you prepare consolidated SOFP, you include inventory, receivables and creditors of parent AND its subsidiary. So you should adjust your cash flows the same way – you look how the companies operate as single entity (as a group).
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