Revising/relearning DFS

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gemmahutchings7
gemmahutchings7 Registered Posts: 7 New contributor 🐸
Hello, newbie Gemma here.

Im STUCK can anyone help?
DFS dec 08 exam 1.4.
i have to prepare a cash flow statement.
the answer stated that the NBV of the asset sold is 580 but i have NO idea whatsoever how to come to or where that figure comes from.

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  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    Hi,

    NBV of assets is arrived at by taking cost and deducting accumulated depreciation.

    You would use the NBV of property plant and equipment (PPE) sold in your workings for PPE additions (you would deduct the NBV of PPE sold in the working i.e. NBV PPE b/f (prior year SoFP), less depreciation charge, less NBV PPE sold, less NBV c/f per current year SoFP = balancing figure = additions). You would also use the NBV of assets sold to arrive at sales proceeds to be used in the 'investing activities' section of the statement of cash flows. You would take NBV of assets sold, add on the gain on disposal (per the Q) to arrive at proceeds.

    Hope that helps.

    Kind regards
    Steve
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    Here's a link to some suggested answers I prepared for D08 DFS paper which might help you understand where some of the figures in various workings come from.

    Kind regards
    Steve
  • gemmahutchings7
    gemmahutchings7 Registered Posts: 7 New contributor 🐸
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    OMG i knew it was going to be something simple. Thanks Steve. I just could work it out for looking at all.
    Think my brain was telling me to have a break!
    Stressing out big time about these exams. Ive got DFS, PCR and PEV to do in June. Wonderful.
    Once again thanks so much for that.
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