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Contents
7.1.1 Extract from FRS102: Section 7.1.
7.1.2.2 Entities exempt from the requirements to provide cash flow statements.
7.2.1 Extract from FRS102: Section 7.2.
7.2.2.2 The criteria for recognition as cash and cash equivalents.
7.3 Information to be presented in the statement of cash flows.
7.3.1 Extract from FRS102: Section 7.3 and Section 7.10A-7.10E.
7.3.2.1 Categories of Cash Flows.
7.3.2.2 Cash flows permitted if reported on a net basis.
7.4.1 Extract from FRS102: Section 7.4 and Section 7.7-7.9.
7.4.2.1 Operating activities -defined.
7.4.2.1.1 Assessing whether an item is an operating or investing activity cash flow.
7.4.2.2 Examples of cash flows from operating activities.
7.4.2.3 Presenting cash flows from operating activities.
7.4.2.3.2.1 Illustration of the indirect method.
7.4.2.3.1.3.1 Illustration of the requirements of the Direct Method.
7.5.1 Extract from FRS102: Section 7.5 and Section 7.10.
7.5.2.1 Investing Activities Defined.
7.5.2.2 Example of cash flow items classified as investing activities.
7.5.2.3 Identifying the actual cash paid for the cash flow Investing Activities.
7.5.2.3.1 Need to show only cash paid in the cash flow- fixed assets on finance lease.
7.5.2.3.2 Fixed Asset not paid at year end.
7.5.2.4 Cash flow permitted to be reported on a net basis.
7.6.1 Extract from FRS102: Section 7.6 and Section 7.10.
7.6.2.1 Financing activities defined.
7.6.2.2 Examples of cash flow items classified as financing activities.
7.6.2.3 Cash flow permitted to be reported on a net basis.
7.7.1 Extract from FRS102: Section 7.14-7.16.
7.7.2.1 Treatment of interest cost capitalised.
7.8.1 Extract from FRS102: Section 7.17.
7.8.2.2 Treatment of Capital Gains Tax.
7.8.2.3 Sales and Purchase Taxes.
7.9 Non-controlling interests-consolidated financial statements.
7.9.1.1 Dividends paid to non-controlling interests.
7.9.1.2 Cash flow for purchase or sale of part of subsidiary where control is not lost.
7.10 Acquisition and disposal of subsidiary.
7.10.1.2 Examples illustrating treatment of acquisitions.
7.10.1.2.1 Cash received as part of acquisition.
7.10.1.2.2 Acquisition part funded by cash and shares.
7.10.1.2.3 Loans assumed as part of acquisition.
7.11 Foreign currency cash flows.
7.11.1 Extract from FRS102: Section 7.11-7.13.
7.11.2.1 Realised foreign exchange gains/losses explained.
7.11.2.1.1 Individual financial statements –settled transactions.
7.11.2.2. Unrealised foreign exchange gains/losses.
7.11.2.2.1.1 Unrealised gain-non-operating.
7.11.2.2.2 Unrealised foreign exchange on cash and cash equivalents.
2.11.2.2.3 Consolidated financial statements.
7.12 Components of cash and cash equivalents.
7.12.1 Extract from FRS102: Section 7.20-7.20A.
7.13.1 Extract from FRS102: Section 7.18-7.19.
7.13.2.2 Examples of non-cash transactions.
7.13.2.3 Non-cash items sample disclosure.
7.14 Sample of Cash Flow Statement.
7.15 Other disclosures – Cash and cash equivalents not available for use.
7.15.1 Extract from FRS102: Section 7.21.
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7.7 Interest and dividends
7.7.1 Extract from FRS102: Section 7.14-7.16
7.14 An entity shall present separately cash flows from interest and dividends received and paid. The entity shall classify these cash flows consistently from period to period as operating, investing or financing activities.
7.15 An entity may classify interest paid and interest and dividends received as operating cash flows because they are included in profit or loss. Alternatively, the entity may classify interest paid and interest and dividends received as financing cash flows and investing cash flows respectively, because they are costs of obtaining financial resources or returns on investments.
7.16 An entity may classify dividends paid as a financing cash flow because they are a cost of obtaining financial resources. Alternatively, the entity may classify dividends paid as a component of cash flows from operating activities because they are paid out of operating cash flows.
7.7.2 OmniPro comment
It is evident from Section 7.14 to 7.16 of FRS102 that entities have a choice as to where dividends and interest paid should be shown, it can be shown either in:
- Operating activities; or
- Financing cash flows as the entity needs to provide a return to the shareholders who provided the capital
It is also evident that entities have a choice as to where dividends and interest income should be shown. It can be shown either in:
- Operating activities; or
- Investing cash flows
7.7.2.1 Treatment of interest cost capitalised
Interest costs which are capitalised as part of the option available in Section 25 of FRS102 should be shown in the cash flow in the same location as the asset to which they are attached to.
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Examples:
Example 1: Cash and cash equivalents.
Example 2: Cash and cash equivalents.
Example 3: Cash flows from operating activities – Indirect Method.
Example 4: Cash flows from operating activities – Direct Method.
Example 5: Need to show only cash paid in the cash flow – fixed assets on finance lease.
Example 6: Fixed asset not paid at year end.
Example 7: Fixed asset not paid at year end.
Example 8: Cash received as part of the acquisition.
Example 9: Cash received as part of the acquisition.
Example 10: Subsidiary acquired partly by way of cash and partly by issuance of shares.
Example 11: Loans assured as part of the acquisition.
Example 12: Settled foreign exchange gain/loss.
Example 13: Unrealised gain-non-operating.
Example 14: Unrealised foreign exchange on cash and cash equivalents.
Example 15: Foreign subsidiaries.
Example 16: Analysis of cash and cash equivalent and net debt.
Example 17: Effective interest rate adjustments.
Example 18: Non-cash items example disclosure.
Example 19: Cash flow statement – see below.
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