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Chapter 17

2.4 Impacts of mid-year acquisition or disposals

If a group acquires a new subsidiary during the year:

 cash will be paid by the group

 100% of S’s assets and liabilities will be consolidated

 GW and NCI will increase.

This will cause impacts in the CSCF.

 Cash paid will be included in “Cash flows from investing activities”

– Net of any cash received on consolidation.

 Workings will need to take into consideration the impact of the

acquisition e.g. Add to PPE, GW, NCI.

 Movements in working capital will take into consideration the assets
and liabilities consolidated e.g. inventory, trade receivables, trade
payables.

If a disposal occurs, the same effects will be represented but with the
opposite impact e.g. cash received to sell sub, sub’s assets and
liabilities removed from workings.

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