Hi,

Obviously when a subsidiary is consolidates it's income statement and balance sheet are consolidated and minority interest is the line that reconciles the portion the company does not actually have claims on.

What about the cash flow statement? A company gets to operating cash flow from net income, adding back D+A, change in working capital, adjusting for cash taxes, etc. And that gives you operating cash flow, but is that actually cash that belongs to the company, or does part of that cash flow belong to the subsidiaries minority holder? I really don't know how subsidiaries are accounted for on the cash flow statement and could use some help here. There is no clear explanation for finding how much cash on the cash flow statement doesn't belong to the company, or if only the cash to the company is accounted for on the cash flow statement, where is the reconciliation in instances of working from net income into operating cash flow?

Thanks.

Subsidaries don't feature by themselves in a consolidated cashflow. Consolidated cashflows are prepared from the consolidated income statement and balance sheet, so any subsidaries have already been accounted for in those statements.

Also, a minority interest doesn't ever really *own* a share of a cash balance. It has a % interest share in the entity and as such gets a % share of profits/(losses) and a dividend (if any are paid) based on its shareholding.

For minority interests in the consolidated cashflow: They are not apportioned any share in arriving at net cashflows from operating profit - just as no apportionment to them is made in the consolidated income statement in arriving at operating profit.

If a minority interest exists in the consolidated accounts, then it is treated under the heading of Financing Activities in the consolidated cashflow. This is logical if you think about it because the minority interest in the group is helping to finance the group. So if there's any cashflow relating to the minority interest then that's where it goes in the consolidated cashflow - usually in the form of any dividends paid to it.