• Avatar of MikeLittle says

      if they don’t pay, then there’s no “cash flow” so it will not appear in the Statement of Cash Flows. The Statement shows where CASH has been received from and where CASH has been paid to. If your clients don’t pay taxes, then there’s no entry in the line for “Taxes paid”


      • avatar says

        Thanks a lot. I just thought since current year tax liability would be in current liability, it might be in changes in working capital under operating activities.

      • Avatar of MikeLittle says

        No – when looking at changes in working capital,and in particular at creditors / payables, we only look at the trade payables and accruals figures. Any proposed dividends are dealt with separately as also are tax liabilities. If it’s a tax current liability, it’s accounted for / taken into account when calculating tax actually paid

  1. avatar says

    Hi Mike,

    I was concerned about how to categorize the dividend paid to NIC. In BPP text book on page412, it was put under cash from investing activity, but I thought it should be under the operating activity based on your note…could you elaborate please…

    • Avatar of MikeLittle says

      @cooper1982, Hi The IAS gives a choice for dividends paid – either operating activities of financing activities ( but NOT investing activities that you have written ) I always include dividends paid as operating but the big four in this part of the World tend to show them in financing.

      Incidentally, how can a dividend PAID to the nic possibly be “cash from investing activities”?

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