Cash flow statement for group companies

[Bijay Shrestha]

Company 'ABC' was incorporated in 2000 with paid up capital of ₹ 1,00,000 (with actual cash flow). Company 'XYZ' was incorporated in 2005 with paid up capital of ₹ 1,00,000 (with actual cash flow).

In FY 2014-15, ABC issued shares for ₹ 3,00,000 and all shares were acquired by XYZ. After this, Total Shares of ABC is ₹ 4,00,000/- out of which XYZ held 75% thereby making it the Holding Company of ABC.

XYZ has to prepare Consolidated Financial Statement for FY 2014-15 for the first time.

Now my query is, In Consolidated Cash Flow Statement, where to show Minority Interest (Rs. 1,00,000 for which actual cash flow happened in 2000). What is the Treatment for Minority Interest in Cash Flow Statement?

If We don't show MI in Cash flow, how will Cash Flow match with Closing Cash balance?

Please suggest.

[DR.MARIAPPAN GOVINDARAJAN]

It is suggested to approach the Chartered Accountant in practice

AI Summary

Non-controlling interest treatment in consolidated cash flow statements requires professional accounting advice for proper presentation and reconciliation. A group accounting query: after a parent acquired control of a subsidiary that previously received paid-up capital by actual cash, the enquirer asks where the resulting non-controlling interest (reflecting earlier cash contribution) should appear in the consolidated cash flow statement and whether omission of a minority-interest line affects reconciliation to the consolidated closing cash balance. The only reply advises consulting a practising chartered accountant and offers no direct accounting prescription.