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Consolidated Cash Flows

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Consolidated Cash Flows

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.
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  • April 9, 2021 at 9:51 pm #616601
    jareerabedin
    Member
    • Topics: 91
    • Replies: 72
    • ☆☆

    Dear sir,
    In the event of a disposal of a subsidiary, we add the overdraft in relation to the subsidiary along with the disposal proceeds in the cash flows from investing activities.

    Could you kindly explain why? Why is the overdraft being included? Aren’t we losing that overdraft, as once the subsidiary is disposed off, the overdraft will go to the buyer as it is no longer ours?

    Thank you

    April 10, 2021 at 1:24 pm #616654
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3396
    • ☆☆☆☆☆

    Losing the overdraft is a good thing.

    Cash is net of overdrafts.

    So losing an overdraft is an inflow of cash.

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