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hi.
I am confused. OpenTuition notes say that dividends paid to non-controlling interest are shown in the Operating Activities of the consol.Cash flow.
EmileWoolf text book says that this item is included in financing activities like dividends paid to shareholders.Whom to believe? where this item should be?
and how often does such question come in the exam?
Hi
It comes up every time there’s a cash flow question – whether it’s F3, F7 or P2.
Now, so far as I am aware, the placement of dividends paid in a Statement of Cash Flow has two possibilities. One – the one I ALWAYS use – is in operating activities. the other – used by BPP, Kaplan, Emile … – is to show it in financing activities.
If you look again at your opentuition notes, I believe that you’ll find a little asterisk by “dividends paid” within the operating activities. That asterisk is talked about by me and the alternative presentation is explained.
But, if you wish to put them within financing activities, that’s fine. No problem
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