Investment in associates

Yes – we’re looking for the CASH received from the associate by way of dividend received.

Working W5A in consolidated statements of financial position is the working for the investment in associates. This is calculated as:

Cost +
Share of post acq RETAINED –
Any impairment

Now we can adapt that for the sake of ease into:

Balance brought forward +
Share of this year’s profit after tax –
Any impairment this year =

Balance carried forward

Well, we know the brought forward – it’s on last year’s SoFP

and we know the carried forward – it’s on this year’s SoFP

(Ignore any impairment for this exercise)

So the difference between the two should be our share of this year’s profit after tax and we know the associate’s profit after tax because that information will be given to us

If our share of that profit after tax is not the same as the difference between the brought forward and the carried forward, then we MUST have received a dividend.

There’s an example of this in the cash flow chapter in the free course notes!

“Opening balance 72 (per SFP)
Share of profit in associates 73 (no tax provided) (P&L)
Dividend received 61 (notes)
Closing balance 96 (per SFP)” – the opening and closing balances information is from the parent’s statement of financial position? And the share of this year’s after tax associate profits is 73? And the notes say that the parent received a dividend of 61 from the associate?

Then the missing figure looks to me like an associate gain through other comprehensive income!

NO!!! The only figure in the cash flow will be “Investment income from associate $61 (from above)”