Page 2 - 27. COMPILER QB - IND AS 7
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INDAS – 7

                                  CASH FLOW STATEMENTS






                                          (TOTAL NO. OF QUESTIONS – 14)


                                                         INDEX

                               S.No.                  Particulars                 Page No.

                                 1                  RTP Questions                   27.1
                                2                  MTP Questions                    27.12

                                3               Past Exam Questions                 27.16


                                                  RTPs QUESTIONS

        Q1 (May 18)
        Company A acquires 70% of the equity stake in Company B on July 20, 20X1. The consideration paid for this

        transaction is as below:
        a)  Cash consideration of Rs 15,00,000
        b)  200,000 equity shares having face of Rs 10 and fair value of Rs 15 per share.
        On the date of acquisition, Company B has cash and cash equivalent balance of Rs 2,50,000 in its books of
        account. On October 10, 20X2, Company A further acquired 10% stake in Company B for cash consideration of

        Rs 8,00,000.
        Advise how the above transactions will be disclosed/presented in the statement of cash flows as per Ind AS 7.
        SOLUTION

        As per Ind AS 7, the aggregate cash flows arising from obtaining control of subsidiaries shall be presented
        separately and classified as investing activities.
        As per Ind AS 7, the aggregate amount of the cash paid or received as consideration for obtaining subsidiaries
        is reported in the statement of cash flows net of cash and cash equivalents acquired or disposed of as part of

        such transactions, events or changes in circumstances.
        Further, investing and financing transactions that do not require the use of cash or cash equivalents shall be
        excluded  from  a  statement  of  cash  flows.  Such  transactions  shall  be  disclosed  elsewhere  in  the  financial
        statements in a way that provides all the relevant information about these investing and financing activities.
        As per Ind AS 7, cash flows arising from changes in ownership interests in a subsidiary that do not result in a
        loss of control shall be classified as cash flows from financing activities, unless the subsidiary is held by an

        investment entity, as defined in Ind AS 110, and is required to be measured at fair value through profit or loss.
        Such  transactions  are  accounted  for  as  equity  transactions  and  accordingly,  the  resulting  cash  flows  are
        classified in the same way as other transactions with owners.

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