CF statement Flashcards
What are the types of inflows for the operating CF under US GAAP?
- Cash collected from customers
- Interest and dividends received
- Proceeds from the sale of securities held for trading
What are the types of outflows for the operating CF under US GAAP?
- Cash paid to employees
- Cash paid to the supplier
- Cash paid for other expenses
- Cash used to purchase trading securities
- Interest paid
- Taxes paid
What are the types of inflows for the investing CF under US GAAP?
- Sale proceeds from fixed assets
- Sale proceeds from long-term investments
What are the types of outflows for the investing CF under US GAAP?
- Purchase of fixed assets
- Cash used to acquire LT investment securities
What are the types of inflows for the financing CF under US GAAP?
- Proceeds from debt issuance
- Proceeds from the issuance of equity instruments
What are the types of outflows for the financing CF under US GAAP?
- Repayment of LT debt
- Payments made to repurchase stock
- Dividend payments
What is the cash flow from operating activities?
It is the inflows and outflows of cash related to a firm’s day-to-day business activities.
What is the cash flow from investing activities?
They are inflows and outflows of cash generated from the purchase and disposal of long-term investments.
In which cash flow components foes investments in securities that are highly liquid are included?
They are in operating activities and not in investing activities.
What is the cash flow from financing activities?
They are cash inflows and outflows generated from the issuance and repayment of capital.
What does the company need to do with non-cash investing and financing activities?
They need to report it in a separate note or a supplementary schedule to the CF statement.
Which standard offers more flexibility for CF classification between US GAAP and IFRS?
IFRS is more flexible.
How is classified interest received under IFRS and US GAAP?
- IFRS: operating or investing
- US GAAP: operating
How is classified interest paid under IFRS and US GAAP?
- IFRS: operating or financing
- US GAAP: operating
How are classified dividends received under IFRS and US GAAP?
- IFRS: operating or investing
- US GAAP: operating
How are classified dividends paid under IFRS and US GAAP?
- IFRS: operating or financing
- US GAAP: financing
How is bank overdraft classified under IFRS and US GAAP?
- IFRS: considered part of cash equivalents
- US GAAP: financing
How are taxes paid classified under IFRS and US GAAP?
- IFRS: generally operating, but it can sometimes be financing or investing
- US GAAP: operating
What section is different between the different presentation option of the CF statement?
The operating section is the only one that is different. CFI and CFF are the same.
What is the presentation under the direct method?
It is similar to the form of an income statement. The sales are at the top, and it deducts all the expenses.