Cash Flow Statement

Question 1

Objective?

Answer 1

Show how the entity generated and used cash and cash equivalents. Classified into operating, investing and financing activities

Question 2

What are cash and cash equivalents?

Answer 2

Cash in hand and demand deposits, plus short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value

Question 3

Presentation method for the activities

Answer 3

Operating activities can use direct or indirect method (indirect most common)

Investing and financing use direct method

Question 4

Starting point for indirect method for operating activities?

Answer 4

Profit/Loss for the period

Question 5

Depreciation, amortisation, impairment and finance costs included in which section?

Answer 5

Operating activities

Question 6

Changes in working capital included in which section?

Answer 6

Operating activities

Question 7

Interest paid/received and dividends received included in which section?

Answer 7

Operating activities

Question 8

Income taxes paid in which section

Answer 8

Operating activities

Question 9

Purchase/Sale of PPE and intangible assets in which section?

Answer 9

Investing activities

Question 10

Purchase/Sale of investments in which section?

Answer 10

Investing activities

Question 11

Purchase/Sale of dividends paid in which section?

Answer 11

Investing activities

Question 12

Purchase/Sale of interest received in which section?

Answer 12

Investing activities

Question 13

Proceeds from/repayments of loans in which section?

Answer 13

Financing activities

Question 14

Issue/repurchase of shares in which section?

Answer 14

Financing activities

Question 15

Finance lease principal repayments in which section?

Answer 15

Financing activities

Question 16

What happens with non-cash transactions?

Answer 16

Non-cash transactions (e.g., asset acquired via finance lease, debt converted to equity) are excluded from the cash flow statement but disclosed in the notes