DFS Cashflows Purchases PPE
AVic
Registered Posts: 6,970
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
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
0
Comments

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
steve0 
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:
(191002171(1103411=692)=16237
13645 missing figure and shown on statement of cash flow?
29'8820 
what was confusing me was what to do with the asset that was sold.
By the way thanks steve0 
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 BS0 
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?0 
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 helps0 
thanks stv, just learnt the formula i different way that was what confusing me
Just too many at the momment0
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