Cash flow after Amalgamation

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PINKESH JAIN (Querist)

28 October 2010 Hi Freinds, I am about to complete an audit and now going through the cash flow statement. the company has taken over two companies under scheme of amalgamation and the PC was paid by issuing some shares as well as cash.I just wanted to know that what adjustments are required to be done in cash flow Statement as shares has been issued without effecting cash.

shakuntala chhangani

shakuntala chhangani (Expert)

11 November 2010 Hi Pinkesh, for cash flow one item should be a current item and the other non current. In ur case, there is no flow of cash to the extent PC is paid by issuing shares and the portion for which cash has been paid will be shown as outflow under investing activities
Regards, CA Shakuntala Chhangani

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PINKESH JAIN

PINKESH JAIN (Querist)

02 March 2011 But shakuntala ji,
Wat bout the cash which I have taken over from the old company??

how to adjust that??

shakuntala chhangani

shakuntala chhangani (Expert)

02 March 2011 Hi again Pinkesh, as i hv already mentioned that to result flow, one item need to be a current item and other non-current. when u take over cash from old entity and in exchange give back cash, only the differencial amount will result into flow and will be shown in CFS.however, don't forget to give effect of the same in adjustment for changes in working capital while calculating cash from operating activities.
Regards, CA Shakuntala Chhangani

PINKESH JAIN

PINKESH JAIN (Querist)

02 March 2011 thanks a lottttt shakuntala ji

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