Dear Sir,
Jocatt acquired Tigret.
FVNA @ DOA:
PPE 15
Intangible assets 18
Trade receivables 5
Cash 7
W1: intangible assets
OB 72
CB (85)
Research project 8
New development 4
New sub 18
Balancing figure 17
Could you please explain why acquired intangible asset of 18 is not included as a purchase of intangible asset in cash flow from investing activities?
Thank you in advance
Ask the Tutor ACCA SBR
Q1 Dec 2010 - Jocatt
Hi,
The figure is part of the assets acquired with the subsidiary. The purchase of the subsidiary is shown as one cash outflow in investing activities where we look at the cash paid to acquire the subsidiary, net of any cash in the subsidiary.
It would be the same for the PPE and receivable balances that were given in the question. We adjust for them in the calculation but don't show them as cash inflows/outflows.
Thanks
many thanks
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