DFS Cashflows Purchases PPE

Hi all

Getting confused on investing activities on the cashflow statement and getting mixed up. Can anyone explane how you work it out please?

Thanks in advance


Vic

Comments

  • Steve Collings
    Steve Collings Registered Posts: 997
    What you are trying to do here is to establish how much cash has been spent in the year on the purchase of PPE. This will involve some degree of incomplete records knowledge.

    A quick formula to work this out is:

    Opening NBV of PPE (from previous years statement of financial position) minus the depreciation charge in the year minus NBV of any PPE sold. Put the closing balance of PPE (NBV) on the credit side of the 'T' account, the difference required to balance the T account off is the additions figure which needs to be put into the statement of cash flows under investing activities.

    Hope that helps.

    Regards
    steve
  • A-Vic
    A-Vic Registered Posts: 6,970
    so say:

    2005 NCA was 19'100 & 2006 NCA was 29'882

    Deprciation charge for year was 2'172

    And PPE costing 1103 with Depre of 411 was sold it would be:-

    (19100-2171-(1103-411=692)=16237


    13645 -missing figure and shown on statement of cash flow?

    29'882
  • A-Vic
    A-Vic Registered Posts: 6,970
    what was confusing me was what to do with the asset that was sold.

    By the way thanks steve :)
  • sdv
    sdv Registered Posts: 585
    FIXED ASSET REGISTER from Intermediate Level

    NCA
    Opening balance.............................................19100... Known figure from BS
    Less asset sold nbv............................................691...work our from Gain/Loss / notes
    Equals Value of assets before purchase...............18409

    Add asset purchased.......................................13645 ??? work out backwards from c/bal
    Total asset before depreciation.........................32054
    Less depreciation.............................................2172.......Known figure from notes / IS
    Closing balance..............................................29882......Known figure from BS
  • A-Vic
    A-Vic Registered Posts: 6,970
    thanks STV but the way its been worked out is confusing and checked today and the figure i had was correct
    (-1) the missing figure was 13646

    So am confused how you have worked it out?
  • sdv
    sdv Registered Posts: 585
    the formula is simple

    opening NCA balance
    less Assets sold
    equals remaining assests brought forward
    add purchases ( normally you need to work out this missing figure)
    equals total of assets before depreciation
    less depreciation
    equals closing balance of NCA.

    once you have written down thos formula

    filling the figures that you know

    ie- NCA opening balance, NCA closing Balance, Depreciation, Assest sold NBV (work out from your notes)

    NOW you can easily work out the Assest purchased during the year

    hope this helps
  • A-Vic
    A-Vic Registered Posts: 6,970
    thanks stv, just learnt the formula i different way that was what confusing me :)

    Just too many at the momment
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