AccountingBasics英语会计基础教学
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1
• Indicate the usefulness of the statement of cash
flows • Distinguish among operating, investing and financing activities • Prepare a statement of cash flows using the direct method • Statement of cash flows- the indirect method
Investing activities
The acquisition/disposal of long-term assets and other investments during a financial period. . Examples include:
Cash inflows from…
Financing activities
Transactions between a company and its owners or between a company and its longterm creditors. Examples include:
Cash inflows from… Cash outflows to… Issuing shares and other Buy back shares equity instruments Issuing bonds and other Repay bonds and other borrowings borrowings Pay dividends (cash dividend)
3
Usefulness of the statement of cash flows
• Helps investors, creditors and other
interested parties to evaluate the following about the entity:
• Ability to generate future cash flows
• Ability to pay dividends and meet obligations • Reasons for difference between profit and net
cash provided (used) by operating activities • Cash investing and financing transactions for the period
• It answers the questions: • Where did the cash come from during the period? • What was the cash used for during the period? • What was the change in the cash balance during the period?
Sale of non-current assets (PP&E, intangibles, share investments) Repayments of loans advanced to other parties
Cash outflows to…
Acquire non-current assets (PP&E, intangibles, share investments) Lend money to other parties
5
Operating activities
• Are transactions involving the acquisition or production of goods and services and the sale and distribution of these goods and services to customers. • Current asset and current liability transactions normally result from the operating activities of a company, such as buying and selling merchandise.
2
STATEMENT OF CASH FLOWS: USEFULNESS AND FORMAT
LO1
• A statement of cash flows provides
information about an entity’s cash receipts and cash payments during a period
4
Classification of cash flows
LO2
• Operating activities • Cash effects of transactions that create income and expenses • Investing activities • Cash effects resulting from acquisition and disposal of long-term assets • Financing activities • Cash effects resulting from long-term borrowing and shareholders’ equity
8
Significant non-cash activities
• Significant financing and investing actiHale Waihona Puke Baiduities that
do not affect cash are not reported in the body of the statement of cash flows, but are disclosed elsewhere in the financial statement • Examples include …
• Indicate the usefulness of the statement of cash
flows • Distinguish among operating, investing and financing activities • Prepare a statement of cash flows using the direct method • Statement of cash flows- the indirect method
Investing activities
The acquisition/disposal of long-term assets and other investments during a financial period. . Examples include:
Cash inflows from…
Financing activities
Transactions between a company and its owners or between a company and its longterm creditors. Examples include:
Cash inflows from… Cash outflows to… Issuing shares and other Buy back shares equity instruments Issuing bonds and other Repay bonds and other borrowings borrowings Pay dividends (cash dividend)
3
Usefulness of the statement of cash flows
• Helps investors, creditors and other
interested parties to evaluate the following about the entity:
• Ability to generate future cash flows
• Ability to pay dividends and meet obligations • Reasons for difference between profit and net
cash provided (used) by operating activities • Cash investing and financing transactions for the period
• It answers the questions: • Where did the cash come from during the period? • What was the cash used for during the period? • What was the change in the cash balance during the period?
Sale of non-current assets (PP&E, intangibles, share investments) Repayments of loans advanced to other parties
Cash outflows to…
Acquire non-current assets (PP&E, intangibles, share investments) Lend money to other parties
5
Operating activities
• Are transactions involving the acquisition or production of goods and services and the sale and distribution of these goods and services to customers. • Current asset and current liability transactions normally result from the operating activities of a company, such as buying and selling merchandise.
2
STATEMENT OF CASH FLOWS: USEFULNESS AND FORMAT
LO1
• A statement of cash flows provides
information about an entity’s cash receipts and cash payments during a period
4
Classification of cash flows
LO2
• Operating activities • Cash effects of transactions that create income and expenses • Investing activities • Cash effects resulting from acquisition and disposal of long-term assets • Financing activities • Cash effects resulting from long-term borrowing and shareholders’ equity
8
Significant non-cash activities
• Significant financing and investing actiHale Waihona Puke Baiduities that
do not affect cash are not reported in the body of the statement of cash flows, but are disclosed elsewhere in the financial statement • Examples include …