Brief Definition
A consolidated cash flow statement is a financial report that shows the combined cash flow activities of a parent company and its subsidiaries. It provides a comprehensive overview of the cash inflows and outflows for the entire corporate group, rather than just the parent company alone.
Further Explanation
A consolidated cash flow statement is a financial report that shows the combined cash flow activities of a parent company and its subsidiaries. It provides a comprehensive overview of the cash inflows and outflows for the entire corporate group, rather than just the parent company alone. This statement helps stakeholders understand how the group generates and uses cash, integrating financial information from all parts of the organization.
Example:
Assume Company A is the parent company with subsidiaries B and C. Each entity has its own cash flow activities, but the consolidated cash flow statement will combine these activities into a single report. The consolidated cash flow statement would summarize these activities, eliminate any intercompany transactions, and present a unified view of the group’s cash flow.