DFS Statement of Cashflow (confused)

Newbie

Hi im new to the forum, I note the statement of cashflow in the studytext does not match the pro forma, ie cash from operating activities is now net cash from operating activities, my question is where do you put the adjustments i.e depn, loss on disposal etc, hope you can help, I am aware of the DFS changes but this has stumped me (my tutor on hols) thanks

Londina

This is Net Cash from operating activities:

Profit from operations
Adjustments for:
Depreciation
Gain on disposal of property, plant and equipment

Operating cash flows before movements in working capital

Decrease/(Increase) in inventories
Decrease/(Increase) in trade receivables
(Decrease)/Increase in trade payables

Cash generated by operations

Tax paid
Interest paid

---

Net cash from operating activities

---

then you have the Cash flow statement :

Investing activities
Proceeds on disposal of property, plant and equipment
Purchases of property, plant and equipment
Net cash used in investing activities

Financing activities
New bank loans raised
Proceeds of share issue
Net cash from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year


Hope that this helps. Otherwise have a look in some past papers for the layout!

Esme

You ususally do journals for the adjustments.

Rinske

My book shows the net cash from operations as the only one in the cash flow statement.

The whole calculation and reconciling to that figure goes in as a note to the financial statements below the cash flow statement.

Clare Finch

cash flow

Hi,

I suggest to look at the December 09 paper to understand the examining style:
Basically the cash flow (full format) is being asked as 2 separate tasks: extracts below

Task 1.6 (10 minutes)

Prepare a reconciliation of profit from operations to net cash from operating activities for Adlington Ltd for the year ended 31 October 2009.

Task 1.7 (15 minutes)

Using the pro-forma in your answer booklet, prepare the statement of cash flows (cash flow statement) for Adlington Ltd for the year ended 31 October 2009.


So for task 1.6 you had to sart with profit from ops, add back depn, deduct profit on disposal, adjust for inventory/receivables/payables/ deduct interestpaid and tax paid.

Then task 1.7 starts with your answer to 1.6

Net cash from operating activities (per your answer to 1.6)

then you need to bring in the investing activities and financing activities.

The actual IAS7 format is 3 sections

Operating
Investing
Financing

They were examined

Operating - task 1.6
Investing - task 1.7
Financing- task 1.7

Hope that makes sense!

Thanks

Clare