Single Entity Cash Flows

Question 1

IAS?

Answer 1

IAS 7

Designed to show changes in cash and cash equivalents

Shows movements only

Question 2

Layout

Answer 2

Cash flows from operating activities

• cash from generated activities
• interest paid
• income taxes paid

Net cash flow from operating activities

Cash flow from investing activities

• Purchase of PPE
• Proceeds from sale of PPE
• interest received
• dividends received

Net cash used in investing activities

Cash flow from financing activities

• Proceeds from issue of share capital
• proceeds from issue of long term borrowings
• dividends paid

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Question 3

T accounts

Answer 3

Balance brought forward is on the side it relates to

Eg for a property plant and equipment (ASSET) it’s a debit

For tax it’s a credit

Question 4

Disclosures

Answer 4

Components of cash and cash equivalents

Reconciliation showing the amounts in the statement of cash flows with the equivalent items shown in the statement of financial position

The accounting policy used in deciding the items included in cash and cash equivalents IAS 1

All entities should disclose together with a commentary by management, any other information likely to be of importance

Question 5

Significant non cash transactions

Answer 5

Many investing and financing activities do not have a direct impact on current cash flows, although the they do affect the capital and asset structure of an entity.

Significant “non cash transactions” should be disclosed

Examples:

• Acquisition of assets either by assuming directly related liabilities or by means of a finance lease
• Acquisition of an entity by means of an issue of equity shares
• Acquisition of non current assets by means of a finance

Question 6

Uk gaap comparison

Answer 6

FRS 102

Exemption from a preparation of a statement of cash flows

Available to members of a group where the parent prepares PUBLICLY AVAILABLE consolidated financial statements

And that member is included in the consolidation

IAS 7

Applies to all entities