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Please explain the procedures an accountant needs to use in order complete the consolidated statement of...

Please explain the procedures an accountant needs to use in order complete the consolidated statement of cash flows?

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Answer #1

A consolidated cash flow statement aggregates the cash flows from financing, investing and operating activities across all majority-owned companies that are legally seperate businesses.

Process of preparing Consolidated Cash Flow Statement

  • First, prepare a seperate cash flow statement for the parent and for each applicable subsidiary, majority-owned investment or joint venture.
  • Next, use a worksheet to adjust any line items to remove intercompany sales and transfers.
  • Next, add each seperate cash flow statement along with the worksheet's adjustments. The final result is a consolidated cash flow statement.

Therefore, by following the above mentioned procedures an account complete the consolidated statement of cash flows.

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