Cash Flow Flashcards
Under US GAAP, where are dividends paid included in the CF statement?
Dividends paid are a financing cost and are included in the financing section of the statement of cash flows.
Under US GAAP and IFRS, how is interest received included in the CF statement?
Interest received is an income statement item and is therefore included in the operating section under U.S. GAAP, although it relates to a company’s investments.
Under IFRS, interest received can be reported in operating activities or investing activities.
Under US GAAP, how are proceeds from following investments reported in the CF statement?
I. Trading securities
II. Available-for-sale securities
III. Held-to-maturity transactions
Cash flows from trading security investments are generally reported in the operating section of the statement of cash flows.
However, cash flows from available-for-sale and held-to-maturity transactions are reporting in the investing section.
Under US GAAP and IFRS, how are income taxes paid reported in the CF statement?
Income taxes paid are an income statement item and are included in the operating section of the statement of cash flows under U.S. GAAP.
Under IFRS, tax payments related to investing or financing activities may be reported in those sections of the statement of cash flows.
What does WICIDS stand for?
W - CFO Working capital changes [OA (CA less Cash/Cash Equivalents) & OL (Non-Interest Bearing)]
I - CFO Income statement activity
C - CFI Capital Expenditures (Non-Current Assets)
I - CFI Investments - Long-Term (+Intangibles)
D - CFF Dividends paid
S - CFF Securities issued or retired/repurchased (Stocks & Bonds, Debt)
How is inventory treated under the Direct and Indirect methods?
Under the Direct Method - As a component of purchases
Purchases = COGS + Change in Inventory
Under the Indirect Method - The change in inventory is a component of net cash provided by operating activities.
