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Consolidated Statement of Cash Flow for the year ended 31 December 2018
RM million RM million
Cash Flow from Operating Activities
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XYZ Bhd
Consolidated Statement of Cash Flow for the year ended 31 December 2018
RM million RM million
Cash Flow from Operating Activities
Profit before tax
Adjustments for:
Depreciation
impairment
Share of profit of associates
Gain/loss on disposal of machinery
Operating profit before working capital changes
Trade receivables
Inventory
Trade payables
Cash generated from operations
Interest paid
Tax paid
Cash flow from operating activities
2
FAR 610 ADVANCED FINANCIAL ACCOUNTING AND REPORTING 1
CONSOLIDATED STATEMENT OF CASH FLOWS
QUESTION 1
Below are the summarised consolidated financial statements of Samudera Bhd group for the year ended
31 December 2016.
2016 2015
RM million RM million
Assets
Property, plant and equipment 35.8 32.8
Investment in associate company 10.4 9.6
Goodwill on consolidation 12.5 5.2
Inventories 38.4 23.4
Trade receivables 25.1 28.5
Short term investments 10.6 12
Cash in hand 7.2 3.5
140 115
RM million
Gross profit 32.78
Operating expenses (14.84)
Share of profit in associate company 3.22
Net profit before tax 21.16
Taxation (2.4)
Net profit after tax 18.76
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Consolidated Statement of Changes in Equity
for the year ended 31 December 2016 (extract)
RM million
Retained profit brought forward 12.1
Profit for the year 15.25
Dividends paid (8.55)
Retained profit carried forward 18.8
Additional information:
1. On 1 January 2016, Samudera Bhd acquired 70% interest in Sensasi Bhd for a cash consideration
of RM28.65 million. The net assets of Sensasi Bhd on the date of acquisition were as follows:
RM million
Property, plant and equipment 1.86
Inventories 9.1
Trade receivables 3
Cash in hand 1.2
Trade payables 1.34
Tax payable 0.89
2. During the year, the company sold a piece of machinery with a carrying value of RM1.48 million
for RM2.64 million
3. The operating expenses include depreciation of RM0.98 million, impairment of goodwill and a
gain on disposal of machinery.
4. As at 31 December 2016, the goodwill on consolidation was impaired for the first time.
6. It is the group’s policy to value the non-controlling interest at its proportionate share of the fair
value of the subsidiary’s identifiable net asset at the date of acquisition.
Required:
Prepare a Consolidated Statement of Cash Flows for Samudera Bhd group for the year ended 31
December 2016 using the indirect method. Notes to the accounts are not required.
(15 marks)
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QUESTION 2
Below are the summarized group statements of financial position of Hugo Bhd as at 30 June 2016 and its
comparative for 2015.
2016 2015
RM million RM million
Assets
Cash and cash equivalents 1,020 1,230
Trade receivables 2,820 2,640
Inventories 3,480 3,600
Property, plant and equipment 5,110 4,440
Goodwill on consolidation 800 720
Investment in associate 2,440 2,340
Held to maturity investment 620 600
16,290 15,570
Additional information:
1. Profit after tax for the year ended 30 June 2016 was RM449 million, after deducting expenses of
RM633 million and tax expense of RM180 million.
2. The expenses of RM633 million include depreciation of RM310 million, impairment of goodwill
of RM57 million and interest on long-term borrowings of RM135 million. The effective interest
rate for the borrowings equated to the coupon rate and all interest due was paid in the year.
3. The held to maturity investment is measured at amortised cost. The investment income
included in the profit for the year was RM32 million. The actual interest received based upon
the coupon rate was RM12 million.
4. The share of profits of associates included in the profit for the year was RM150 million.
5. Profit for the year attributable to the non-controlling interest and the equity holders of the
parent were RM61 million and RM388 million respectively.
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6. During the year, property, plant and equipment of RM740 million were purchased for cash.
There were no disposals of property, plant and equipment during the year.
7. On 1 January 2016, Hugo Bhd acquired 70% of the ordinary shares of Shilo Bhd for a cash
consideration of RM445 million. The fair values of the net assets of Shilo Bhd on 1 January 2016
were as follows:
RM million
Property, plant and equipment 240
Trade receivables 200
Cash and cash equivalents 380
Trade payables 380
8. The group valued the non-controlling interest at its proportionate share of the fair value of the
net assets of the subsidiaries at acquisition date.
Required:
Prepare the Consolidated Statement of Cash Flows for Hugo Bhd Group for the year ended 30 June 2016
using the indirect method.
(Total: 15 marks)
SOLUTION
QUESTION 1
Workings:
Trade Receivables
b/d 28.5 Cash 6.4√
Acq. of Sensasi 3√ c/d 25.1
Inventory
b/d 23.4
Cash 5.9√
Acq. of Sensasi 9.1√ c/d 38.4
Trade Payables
b/d 23.4
Cash 4.14√ Acq. of Sensasi 1.34√
c/d 20.6
Tax Payables
Cash 0.89 b/d 24.3
Acq. of Sensasi 0.89√
c/d 26.7 CSOCI 2.4√
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Non-Controlling Interest
Cash 4.69√ b/d 15.2
Acq. of Sensasi (12.93 x 30%) 3.88 √
c/d 17.9 CSOCI 3.51√
Investment in Associates
b/d 9.6 Dividend received 2.42√
CSOCI 3.22√ c/d 10.4
Retained earning
Tax - b/d 12.10
Dividend 8.55√ PAT 15.25 √
c/d 18.80
27.35 27.35
-
Goodwill
b/d 5.2 CSOCI (impairment) 12.30√
Acq of subsidiary 19.60√ c/d 12.5
Calculation Goodwill
Consideration transferred RM28.65
NCI (12.93 x 30%) RM3.88
RM32.53
Less FV of Net Asset
PPE 7.0
Inventory 2.1
Trade Receivable 5.2
Bank 2.63
Trade Payable (2.50)
Tax Payable (1.50) RM12.93
Goodwill RM19.60
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Samudera Bhd
Consolidated Statement of Cash Flow for the year ended 31 December 2016
RM million RM million
Cash Flow from Operating Activities
Profit before tax 21.16 √
Adjustments for:
Depreciation 0.98 √
Goodwill impairment 12.30 √√
Gain on disposal of machinery (1.16) √
Share of profit of associates (3.22) √
Operating profit before working capital changes 30.06
Decrease in trade receivables 6.4 √√
Increase in inventory (5.9) √√
Decrease in trade payables (4.14) √√
Cash generated from operations 26.42
Tax paid (0.89) √√
Net cash from operating activities 25.53
(30√x1/2 = 15 marks)
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QUESTION 2
Hugo Bhd Group
Consolidated Statement of Cash Flow for the year ended 30 June 2016
RM’mill RM’mill
Cash Flow from Operating activities
Profit before taxation (449+180) 629 √√
Adjustments for:
Depreciation 310 √
Investment income (32) √
Interest on borrowings 135 √
Goodwill impairment 57 √
Share of associate profit (150) √
Changes in Working Capital
Decrease in inventories (3,480 -3,600) 120 √
Decrease in receivables (2,820 -2,640)-200 20 √√
Decrease in payables (3,335 – 3,060) -380 (105) √√
Cash generated from operations 984
Tax paid (W) (240) √√
Interest paid (135) √
Net cash inflow from operating activities 609
(30 / x ½ = 15 marks)
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Workings:
Retained Earnings
Dividend 213√ Bal b/d 2,010
Bal c/d 2,185 P& L 388√
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