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Dec 2013 Q1_Angel cashflow

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Dec 2013 Q1_Angel cashflow

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  • May 3, 2018 at 8:22 am #449909
    sss111
    Member
    • Topics: 37
    • Replies: 5
    • ☆

    Refering to note (iii) why don’t we deduct the benefits paid by trustees of scheme $6m from operating activities in cashflow statement ? What is the treatment for this activity ?

    Thank you in advance!

    May 4, 2018 at 9:48 pm #450135
    P2-D2
    Keymaster
    • Topics: 4
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    • ☆☆☆☆☆

    Hi,

    The benefits paid out have no net cash effect. To pay the benefits the assets are liquidated, giving us a cash receipt but then this is paid out and reduces the liability. The inflow and outflow both net off to zero, hence nothing is seen in the SCF.

    Thanks

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