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FAR > Cash Flows > Flashcards

Cash Flows Flashcards

1
Q

Bond premium amortization on long term debt - how is this shown in the operating activities section using the indirect method?

A

Deduction from net income

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2
Q

Bond discount amortization on long term debt - how is this shown in the operating activities section using the indirect method?

A

Addition to net income

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3
Q

Premium or Discount amortization tip

A

DA - DISCOUNT ADD

PD - PREMIUM DEDUCT

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4
Q

Cash paid for interest in bonds is reported in

A

Operating activities

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5
Q

Interest received and paid

A

Always operating activities

whether they are related to AVS, trading or HTM

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6
Q

Dividends received and paid

A

RECEIVED - operating

PAID - financing

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7
Q

Long term debt - bonds issued by entity

issuance and retirement

A

financing

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8
Q

Loans made by entity to others

disbursement and collection proceeds

A

Investing

interest received i operating

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9
Q

Acquisition and disposal of AVS

A

investing

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10
Q

Acquisition and disposal of trading securities

A

operating

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11
Q

Acquisition and disposal of PPE and intangibles

A

investing

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12
Q

Cash outflow and inflow related to Notes Receivable

A

investing

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13
Q

All borrowings and repayment of loans

Loans payable

A

financing

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14
Q

All Notes payable transactions

A

financing

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15
Q

Financing

A 
issuance/payment on retirement of bonds
issuance/reacquisition of treasury stocks
issuance of shares of stocks
borrowing/repayment of loan
loan payable
notes payable
DIVIDENDS PAID
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16
Q

Investing

A 
LIP - loans, investments, PPE 
loans granted to others - investment
AVS 
intangibles
Notes receivables
17
Q

Operating

A 
sales, purchases
all interests received and paid
dividends - received only
trading securities
income taxes
18
Q

Indirect method - operating activities

A 
Net Income
Add/Deduct non cash items in IS
Premium amort - deduct
Discount amort - add
Increase/Decrease in AR, AP, inventory, allowance for BD, interest payable, tax payable, deferred tax liabitlity, prepaid expenses
19
Q

Direct method - operating activities

A 
Cash collection from sales
Cash paid for purchases
cash paid for expenses 
cash paid/received for interest
cash paid/received for taxes
cash paid/received for trading securities transactions
20
Q

Is cash flow per share disclosed in the Income Statement?

A

NO

21
Q

SUPPLEMENTAL DISCLOSURES - direct method

A
  • schedule to reconcile net income to cash flow provided/used by operations

*schedule of non cash financing and investing activities
*transactions without effect on cash:
- conversion of bonds to stock
- purchased financed entirely by loan (no actual
cash received or paid)

22
Q

SUPPLEMENTAL DISCLOSURES - indirect method

A
  1. all cash payments for interest and income
    taxes
  2. schedule of non cash investing and financing
    activities
23
Q

IFRS cash flows

A
  1. direct or indirect method ok
  2. Indirect method - use modified indirect method
    format differs from GAAP - all revenues and
    expenses in one group then total; under
    that are the changes in working capital
    accounts
  3. Bottom whould show a reconciliation of the
    cash flows amount VS amounts in the
    statement of financial position
  4. interests and dividends received - are
    OPERATING OR INVESTING
  5. interest and dividends paid - are OPERATING
    AND FINANCING
  6. ok to choose but should be consistent
  7. income taxes paid - disclosed separately in
    operating activities
  8. cash flows from other taxes - depends in the
    transaction they are related to
  9. non cash activities - DISCLOSE IN THE NOTES
  10. if direct method is used -NO RECONCILIATION
    at the bottom required - this is only shown
    in the NOTES TO FS
24
Q

In IFRS, interest and dividends received are reported in

A

OPERATING OR INVESTING

25
Q

In IFRS, interest and dividends paid are reported in

A

OPERATING OR FINANCING

26
Q

IFRS notes to financial statements should include:

A

Related to cash flows:

  1. Statement reconciling net income to cash flow
  2. Significant non cash activities for cash flows

Other disclosures:

  1. Information about the basis of preparation of
    FS and policies used
  2. info required by IFRS that is not presented
    elsewhere in the FS
  3. additional info not presented elsewhere but relevant to the understanding of the FS
27
Q

IFRS format review page 25-15

A

practice

28
Q

IFRS - bank overdraft cash advance

A

operating activities

FAR (41 decks)

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