IAS 07 Cash Flow Statements

Terms :
 Cash – cash on hand and demand deposits
 Cash equivalents – short term (three months or less), highly liquid investment that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value
 Cash flow – inflows and outflows of cash and cash equivalents
 Operating activities – principal revenue-producing activities of the entity and other activities that are not investing or financing activities
 Investing activities – the acquisition and disposal of long-term assets and other investment not included in cash equivalents
 Financing activities – activities that result in changes in the size and composition of the contributed equity and borrowing of the entity
 Consolidated FS – FS of a group presented as those of a single economic entity
 Subsidiary – an entity, including an unincorporated entity like partnership, which is controlled by another entity
 Associate – an entity, including an unincorporated entity like partnership, over which the investor has significant influence and that is neither a subsidiary not a joint venture
 Joint venture – contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control
Presentation of Statement of Cash Flows :
 Operating activities
 Investing activities
 Financing activities

Reporting of Statement of Cash Flows :
 Direct method – disclosed major classes of gross cash receipts and gross cash payments
 Indirect method – net profit or loss is adjusted for the effect of changes in working capital, non-cash items, and investing or financing cash flows
 Cash flows from taxes on income, interest and dividend received should be disclosed separately and in consistent manner from period to period as either operating, financing, or investing activities.

Disclosure :
 Aggregate cash flows arising from obtaining and losing control
 Significant amount of cash and cash equivalents not available for use by the group
 Additional disclosure encouraged along with management comment
 Separate disclosure of aggregate amount that is increase vs maintain operating capacity
 Disclosure of segmental cash flows