Cashflow - Reconciliation

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Does anyone know if we will have to perform a reconciliation of operating profit to net cash flows from operating activities under the new standards? I am going through some past papers and this reconciliation is appearing but I have not seen this before in my FTC books!!!

Anyones input would be greatly appreciated as I am starting to panic now!!!

:cry::cry:

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cashflow - Reconciliation

    A couple of the previous papers have asked that question, so best to read up.

    OPerating profit before tax and interest
    plus depreciation
    Increase or decrease in inventorie
    increase or decrease in trade receivables
    increase or decrease in trade payables
    plus or minus profit or loss on sales of non current assets
    less interest
    less tax
    = net cash flow for operating activities

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cashflow - Reconciliation

    Thanks Petrolmonkey.

    Is there any way to work out the figure you are reconciling to so that you know if the rec is right?

    Thanks.

    Susan

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cashflow - Reconciliation

    Not at that stage, unless the question gives you the net cash flow and wants you to reconcile from operating cash to net cash flow, which is quite often the case.

    Or produce the whole cash flow statement including the investing and financing activities and the net increase or decrease in cash and cash equivalent figure should equate to the cash movements (difference between the bank balance at the beginning and end of the year and any other short term funds)


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