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HELP please FNST

jojo1979jojo1979 Feels At HomeRegistered Posts: 75
Hi guys,

Really sorry its cashflow again. Im really struggling to understand where the figures for the purchase of PP&E are coming from in the practice assessment. I have gone through my notes and i can only find one other example of this and i dont understand the notes i have written.
Can anyone please explain this so i can understand it? Many thanks

P.s also the interest figures am not 100%sure on

Comments

  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    Hello

    I don't have the simulation to hand, but normally to get to the PPE additions figure you take the net book value of non-current assets from the previous year's statement of financial position:

    Deduct depreciation charge in the current year
    Deduct net book value of any non-current assets sold in the current year

    The difference between the figure you get at this point and the net book value of PPE in the current year's statement of financial position is the additions figure.

    The interest paid figure is usually ascertained by saying:

    Opening interest creditor b/fwd (from previous year's SoFP)
    Plus the interest charge per the income statement
    Deduct the interest credit c/fwd (from current year's SoFP)

    The balancing figure is the interest paid for the statement of cash flows.

    Hope that helps.

    Steve
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    Hello

    I don't have the simulation to hand, but normally to get to the PPE additions figure you take the net book value of non-current assets from the previous year's statement of financial position:

    Sometimes need to combine this with the profit/loss on sale, and depeciation figures to arrive at a balancing figure for additions/disposals.
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