Conception of Cash Flow Statement on the Consolidated Basis

There are available only two theoretical concepts of consolidation of cash flow statement: concept of pure consolidation and investment concept. The principal criterion for the classification of concepts of consolidated cash flow statement is the way of involvement of gross cash outflow and gross cash inflow from the acquisition of subsidiary, or from its disposal respectively. Good understanding of theoretical concepts of consolidation of cash flow statement is essential for correct interpretation of consolidated figures of cash flow statements. However the investment concept only can present relevant information about the cash flows. IAS 7 and other advanced standard on cash flow statement are based on investment concept.