Consolidated cash flow statement

Is it correct ? GOODWILL Opening balance 4160 acquisition of sub ( 4000 +2000 )shares and cash -(5000@75%) 2250 Closing balance 6410 And there is no cash flow so not put in the cash flow statement

Yes, and no! An exam question would (normally) give you details of the value of the nci's 25% so goodwill would look at the full value of the subsidiary and compare with the net assets at date of acquisition No, and that's a big NO, for your final statement! Of course there's a cash flow! There's $2 million flowing out. However, there's also 50 being received as a result of the acquisition. Now, here's a problem (for me)! I don't know whether the "50" mentioned in your question is 50, 50,000, or 50,000,000 but whichever it is, that information needs to be used in the group cash flow preparation. Within "Investing activities" there will be the line "Acquisition of subsidiary" and the cash flow is the NET cash flow that arose when the subsidiary was acquired. In your example that figure is $2,000,000 less this rogue $50, $50,000 or $50,000,000 If it's $50,000,000 in your case, that leads to the apparently strange situation of "Acquisition of subsidiary $48,000,000 INFLOW" Ok?

Thank a lot ! Mike it's really helpful for me . And It's $50000 cash.

So the investing activities line will read "Investment in subsidiary ($1,950,000) Ok?

Thanks again ! Mike

You're welcome