[et_pb_section bb_built=”1″ admin_label=”Header – All Pages” transparent_background=”off” background_color=”#1e73be” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” custom_padding=”0px||0px|” next_background_color=”#000000″ custom_padding_tablet=”50px|0|50px|0″ custom_padding_last_edited=”on|desktop” global_module=”1221″][et_pb_row admin_label=”row” global_parent=”1221″ make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”||5px|” allow_player_pause=”off” parallax=”off” parallax_method=”on” make_equal=”off” parallax_1=”off” parallax_method_1=”off” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_post_title global_parent=”1221″ title=”on” meta=”off” author=”on” date=”on” categories=”on” comments=”on” featured_image=”off” featured_placement=”below” parallax_effect=”on” parallax_method=”off” text_orientation=”left” text_color=”light” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_padding=”10px|||” parallax=”on” background_color=”rgba(255,255,255,0)” /][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” custom_padding=”30px||0px|” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” background_color=”#1e73be” prev_background_color=”#000000″ next_background_color=”#ffffff” custom_padding_tablet=”0px||0px|” global_module=”1228″][et_pb_row global_parent=”1228″ make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”30px||0px|” allow_player_pause=”off” parallax=”off” parallax_method=”off” make_equal=”off” parallax_1=”off” parallax_method_1=”off” column_padding_mobile=”on” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text global_parent=”1228″ background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” background_position=”top_left” background_repeat=”repeat” background_size=”initial”] [breadcrumb] [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″ custom_padding_tablet=”0px||0px|” custom_padding_last_edited=”on|desktop” prev_background_color=”#1e73be” next_background_color=”#000000″][et_pb_row][et_pb_column type=”4_4″][et_pb_toggle admin_label=”Index” _builder_version=”3.0.106″ title=”Index” open=”off”]
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.
[/et_pb_toggle][/et_pb_column][/et_pb_row][et_pb_row][et_pb_column type=”3_4″][et_pb_text admin_label=”Main Body Text” background_layout=”light” text_orientation=”justified” use_border_color=”off” border_color_all=”off” module_alignment=”left” _builder_version=”3.0.106″]
7.8 Income tax
7.8.1 Extract from FRS102: Section 7.17
7.17 An entity shall present separately cash flows arising from income tax and shall classify them as cash flows from operating activities unless they can be specifically identified with financing and investing activities. When tax cash flows are allocated over more than one class of activity, the entity shall disclose the total amount of taxes paid
7.8.2 OmniPro comment
7.8.2.1 Taxation Generally
As per 7.17 of FRS102 taxation paid/refunded should be shown separately from the reconciliation of the profit to the reconciliation of profit to net cash inflow from operating activities but is still classed as an operating activity. See this illustrated in the cash flow at 7.14.
7.8.2.2 Treatment of Capital Gains Tax
The only exception to the aforementioned point is where capital gains tax is paid, in this case it would be more appropriate to show this within investing activities.
7.8.2.3 Sales and Purchase Taxes
Although no guidance is provided in relation to sales and purchase taxes, it would be usual for these to be shown net in the cash flow statement where the VAT is recoverable/payable. Where an entity is not registered for VAT it should be shown gross in the cash flow. The movement on the net vat liability/refund is shown within operating activities.
[/et_pb_text][/et_pb_column][et_pb_column type=”1_4″][et_pb_toggle _builder_version=”3.0.106″ title=”Practical Examples” open=”off”]
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.
[/et_pb_toggle][/et_pb_column][/et_pb_row][/et_pb_section]