IAS 7Chapter 7Lesson 1
Buying or selling a subsidiary, changing the interest held
Step 1 of 8Learning objectives
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The total cash effect of gaining or losing control of a subsidiary is shown on separate lines in investing, at the amount paid or received net of the cash acquired or disposed of, without offsetting acquisitions and disposals; disclosures detail the consideration and the assets and liabilities involved. Purchases or sales of interests without a change of control are transactions between owners: they are financing.
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Learning objectives
- Calculate the cash flow on acquiring or disposing of a subsidiary net of cash acquired or disposed of.
- Prepare the disclosures on obtaining and losing control.
- Distinguish obtaining control (investing) from buying additional interests without a change of control (financing).