![]() Therefore, we can use the average rate in 2016 and for the specific cash flow – dividends paid – we use the actual rate valid at the date of cash flow. 26 and 27 clearly says that you should translate cash flows using the foreign exchange rate at the date of cash flow (transaction date) and you can use the average rate for the period for approximation. In this step, you need to recalculate all the line items in subsidiary’s cash flows to show them in presentation currency. ![]() Step 2 – Translate subsidiary’s individual statement of cash flows to the presentation currency I am not going to do this step in details here, because I published a complex article on how to prepare statement of cash flows here.Īlso, if you need more detailed explanations with analysis of various types of transactions, then I recommend checking out my IFRS Kit where cash flows are extensively covered. Step 1 – Prepare individual statements of cash flows of both parent and subsidiary Prepare consolidated statement of cash flows for the year ended 31 December 2016. The financial statements of Hello and GutenTag as at 31 December 2016: The goods remained unsold at the year-end and the payable was unpaid.
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