Consolidated statement of cash flows - F2 Flashcards
What does IAS 7 provide guidance on?
IAS 7 statement of cash flows provides guidance on the preparation of a statement of cash flows
What does the cash flow enable users to assess?
Liquidity, solvency and financial adaptability
What is cash?
Cash consists of cash in hand and deposits repayable upon demand, less overdrafts. This includes cash held in a foreign currency
What are cash equivalents?
Cash equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value
What is a cash flow?
Cash flows are inflows and outflows of cash and cash equivalents
What is cash flows from operating activities?
entity’s principal revenue earning activities and other activities that do not fall under the next two headings
What is cash flows from investing activities?
acquisition and disposal of long-term assets and other investments (excluding cash equivalents
What is cash flows from financing activities?
activities that change the size and composition of the entity’s equity and borrowings
What adjustments are needed under the indirect method?
depreciation, amortisation and impairment
profit or loss on disposal of non-current assets
movements in inventory
movements in receivables
movements in payables
What would appear under the heading cash flows from investing activities?
Cash paid/received for PPE and other non-current assets
Cash paid/received for investments in or loans to other entities
What would fall under the heading cash flows from financing activies?
Cash inflows:
Receipts from issuing shares
Receipts from issuing debentures, loan notes, bonds and other long-term/short-term borrowings
Cash outflows:
Repayments of amounts borrowed
Capital element of lease rental payments
Payments to reaquire of redeem the entity’s shares
