S2 - cash flows

Question 1

what are cash equivalents

Answer 1

short term, highly liquid investments which are readily convertible into known amount of cash which are subject to an insignificant risk of changes in value
May include short term investments where the maturity date is less than 90 days

Question 2

what is the order of activities

Answer 2

Operating
Investing
Financing

Question 3

what happens to non cash items

Answer 3

adjust cash flow
Amortisation/depreciation isn’t cash

Question 4

what are the disclosures

Answer 4

major non cash transactions
Components of cash and cash equivalents
Segmental information

Question 5

what is the question approach

Answer 5

calculate differences in SOFP and decide on classification
Identify relevant items in IS after operating profit and classify
Identify any acquisitions, disposals and depreciation charges affecting cash flows
Profit/loss on sale of asset —> + NBV = proceeds
Difference in cash = (depreciation) + (disposals) + additions