PAS 7: STATEMENT OF CASH FLOWS Financing activities

Cash derived from equity capital and borrowings of the

entity
comprises cash on hand and demand deposits
 Cash receipts or Cash payments /Repayments for:
Cash equivalents
short-term highly liquid investments that are
readily convertible into cash (subject to significant risk Equity financing – is the issuance of shares,
or changes) which includes : redemption
debt instruments acquired which are about to Debt financing – is the issuance of bonds, notes,
mature within 3 months or less loans, mortgage payables and other short-term or long-
term borrowings
90 day money market instrument
90 days time deposit
Presentation of the cash flows
Cash flows
 Direct method - shows each major class of
includes inflows (sources) and outflows (uses) Gross Cash Receipts and Gross cash payments
of cash and cash equivalents.  Indirect method - profit or loss is adjusted for
The Statement of Cash Flows helps to assess the: the effects of non-cash items and changes in
operating assets and liabilities
 Ability of the entity to generate cash and cash
equivalents Changes in Ownership interest in Subsidiaries
 Timing and certainty of the generation of cash Investing Activity arising from acquisition or
flows disposal of subsidiaries
 Needs of the entity to utilize those cash flows
Business units resulting to loss
If not, then it is classified as Financing Activity
Classification of cash flows
Disclosure
Operating activities
 Components of Cash and Cash equivalents
derived from the revenue producing activities of  Reconciliation of amounts in the Statement of
the entity (revenue & exp.) affect profit or loss Cash Flows with the equivalent items in the
 Cash receipts from customers Statement of Cash Flows
 Cash payments to suppliers  Cash and cash equivalent held by the entity that
 Cash payments for operating expenses are not available for use of the group
 Cash receipts and payments for securities held for
trading
Investing activities
derived from the acquisition and disposal of
long-term assets and other investments not included in
the cash equivalents
 Cash receipts from sale of PPE/Long term assets
and intangibles
 Cash payments to acquire PPE/Long term assets
and intangibles
 Cash advances / loans to other parties
 Cash receipts from repayments of loans