Chapter7

StatementofCashflows

IAS7

11.

Maindefinitions:Cashandcashequivalentscomprisecashonhandanddemanddeposits,togetherwithshort-term,highlyliquidinvestmentsthatarereadilyconvertibletoaknownamountofcash,andthataresubjecttoaninsignificantriskofchangesinvalue.Guidancenotesindicatethataninvestmentnormallymeetsthedefinitionofacashequivalentwhenithasamaturityofthreemonthsorlessfromthedateofacquisition.2Equityinvestmentsarenormallyexcluded,unlesstheyareinsubstanceacashequivalent(e.g.preferredsharesacquiredwithinthreemonthsoftheirspecifiedredemptiondate).Bankoverdraftswhicharerepayableondemandandwhichformanintegralpartofanenterprise'scashmanagementarealsoincludedasacomponentofcashandcashequivalents.32.PresentationoftheStatementofCashFlowsCashflowsmustbeanalysedbetweenoperating,investingandfinancingactivities.Operatingactivities

aretheprincipalrevenue-producingactivitiesoftheenterpriseandotheractivitiesthatarenotinvestingorfinancingactivities.Investingactivities

aretheacquisitionanddisposaloflong-termassetsandotherinvestmentsnotincludedincashequivalents.Financingactivities

areactivitiesthatresultinchangesinthesizeandcompositionoftheequitycapitalandborrowingsoftheenterprise.114Examplesofcashflowsfromoperatingactivitiesare:(a)cashreceiptsfromthesaleofgoodsandtherenderingofservices;(b)cashreceiptsfromroyalties,fees,commissionsandotherrevenue;(c)cashpaymentstosuppliersforgoodsandservices;(d)cashpaymentstoandonbehalfofemployees;115Examplesofcashflowsarisingfrominvestingactivitiesare:(a)cashpaymentstoacquireproperty,plantandequipment,intangiblesandotherlong-termassets.Thesepaymentsincludethoserelatingtocapitaliseddevelopmentcostsandself-constructedproperty,plantandequipment;(b)cashreceiptsfromsalesofproperty,plantandequipment,intangiblesandotherlong-termassets;(c)cashpaymentstoacquireequityordebtinstrumentsofotherenterprisesandinterestsinjointventures;(d)cashreceiptsfromsalesofequityordebtinstrumentsofotherenterprisesandinterestsinjointventures;(e)cashadvancesandloansmadetootherparties(otherthanadvancesandloansmadebyafinancialinstitution);(f)cashreceiptsfromtherepaymentofadvancesandloansmadetootherparties(otherthanadvancesandloansofafinancialinstitution);116Examplesofcashflowsarisingfromfinancingactivitiesare:(a)cashproceedsfromissuingsharesorotherequityinstruments;(b)cashpaymentstoownerstoacquireorredeemtheenterprise'sshares;(c)cashproceedsfromissuingdebentures,loans,notes,bonds,mortgagesandothershortorlong-termborrowings;(d)cashrepaymentsofamountsborrowed;and(e)cashpaymentsbyalesseeforthereductionoftheoutstandingliabilityrelatingtoafinancelease.117InterestandDividends

interestanddividendsreceivedandpaidmaybeclassifiedasoperating,investing,orfinancingcashflows,providedthattheyareclassifiedconsistentlyfromperiodtoperiod118TaxesonIncome

cashflowsarisingfromtaxesonincomearenormallyclassifiedasoperating,unlesstheycanbespecificallyidentifiedwithfinancingorinvestingactivities1193.DisclosureInvestingandfinancingtransactionswhichdonotrequiretheuseofcashshouldbeexcludedfromthestatementofcashflows,buttheyshouldbeseparatelydisclosedelsewhereinthefinancialstatements.Thecomponentsofcashandcashequivalentsshouldbedisclosed,andareconciliationpresentedtoamountsreportedinthestatementoffinancialposition.Theamountofcashandcashequivalentsheldbytheenterprisethatisnotavailableforusebythegroupshouldbedisclosed,togetherwithacommentarybymanagement.11104.MethodsofpreparingstatementofcashflowsForoperatingcashflows,thedirectmethodofpresentationisencouraged,buttheindirectmethodisacceptable1111directmethodThedirectmethodshowseachmajorclassofgrosscashreceiptsandgrosscashpayments.Theoperatingcashflowssectionofthestatementofcashflowsunderthedirectmethodwouldappearsomethinglikethis:Cashreceiptsfromcustomersxx,xxxCashpaidtosuppliersxx,xxxCashpaidtoemployeesxx,xxxCashpaidforotheroperatingexpensesxx,xxxInterestpaidxx,xxxIncometaxespaidxx,xxxNetcashfromoperatingactivities

xx,xxx12indirectmethodTheindirectmethod,wherebynetprofitorlossisadjustedfortheeffectsoftransactionsofanon-cashnature,anydeferralsoraccrualsofpastorfutureoperatingcashreceiptsorpayments,anditemsofincomeorexpenseassociatedwithinvestingorfinancingcashflows.13Theoperatingcashflowssectionofthestatementofcashflowsundertheindirectmethodwouldappearsomethinglikethis:Profitbeforeinterestandincometaxes

xx,xxxAddbackdepreciation

xx,xxxAddbackamortisationofgoodwill

xx,xxxDecreaseinreceivables

xx,xxxDecreaseininventories

xx,xxxIncreaseintradepayables

xx,xxxInterestpaidxx,xxxIncometaxespaid

xx,xxxNetcashfromoperatingactivities

xx,xxx14

showtheabilitytogeneratecashcashismorecomprehensivethanprofitcreditorsaresatisfiedabettermeansofcomparingresultssatisfiestheneedsofallusersbettereasiertopreparecanbeauditedeasiereasiertobeunderstoodprovidemoreinformationforecastscanbecomparedwithactualcashflows11Theadvantagesofstatementofcashflows159、春去春又回，新桃換舊符。在那桃花盛開(kāi)的地方，在這醉人芬芳的季節(jié)，愿你生活像春天一樣陽(yáng)光，心情像桃花一樣美麗，日子像桃子一樣甜蜜。2月-252月-25Sunday,February16,202510、人的志向通常和他們的能力成正比例。17:14:2917:14:2917:142/16/20255:14:29PM11、夫?qū)W須志也，才須學(xué)也，非學(xué)無(wú)以廣才，非志無(wú)以成學(xué)。2月-2517:14: