Consolidated cash flows - part 2

In this lesson

1. 0:00 NCI dividends in group cash flows
2. 1:11 Working example: calculating NCI dividend paid
3. 4:09 Associates in consolidated cash statements
4. 5:49 Working example: calculating dividend from associate
5. 7:30 Adjustments for associate acquisitions and disposals

About this lesson

You'll discover how to calculate dividends paid to NCIs by working through the NCI balance movement, and how to determine dividends received from associates using the investment in associate balance. These adjustments are essential for preparing the statement of cash flows under IFRS standards and are frequently examined in SBR and AFM papers. The video walks you through the mechanics of NCI accounting first. You'll see how to build a working that starts with the opening NCI balance, adds acquisitions at fair value, removes disposals at their carrying amount, includes the NCI's share of total comprehensive income, and arrives at the closing NCI balance. The balancing figure gives you the cash dividend paid to the NCI, which you'll then disclose separately in financing activities. A worked example using Schine Company shows you exactly how to handle multiple transactions—acquisitions, disposals, and profit shares—in a single year. The second part covers associates. Since associates aren't consolidated line by line, you need to extract specific cash flows separately. You'll learn that dividends received from associates are calculated as a balancing figure from the investment in associate account, using the same build-up method: opening balance, add the group share of profit and other comprehensive income, add acquisitions, remove disposals, and account for non-cash items like exchange movements. The Earth Company example demonstrates this clearly, showing how to isolate the dividend received when the associate has generated profit and revaluation gains. Throughout, you'll see why these adjustments matter: they convert non-cash accounting entries (like your share of associate profits) back into actual cash movements, ensuring your cash flow statement accurately reflects what cash the group has actually paid out or received.

Duration: 8m