What issue must be considered in a consolidated cash flow statement?

In the context of preparing a consolidated cash flow statement, cash flows related to non-controlling interests must indeed be considered. This is because consolidated financial statements present the financial position and performance of a group of entities as if they were a single entity, including all cash flows generated by the entire group, not just those attributable to the parent company.

Non-controlling interests represent ownership interests in a subsidiary not owned by the parent. When compiling the consolidated cash flow statement, it’s important to recognize how cash flows related to non-controlling interests impact the overall cash position of the group. This involves including cash flows that affect these non-controlling interests, such as dividends paid to them, or their share of cash flows from operating, investing, and financing activities.

In contrast, the other options do not reflect the necessary considerations for a consolidated cash flow statement. For example, recognizing only cash flows to the owner, excluding cash received from associates, or not including acquisitions of joint ventures does not provide a complete or accurate representation of the cash flows of the consolidated entity. These items would misrepresent the financial realities of the group and undermine the utility and reliability of the cash flow statement for stakeholders.