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Statement of cash flows – Example 1 (revision) – ACCA Financial Reporting (FR)

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  2. Hi, will t accounts come up in this exam? I’m able to work out the figures without them by adding and subtracting for example. Will this lose me working marks in the exam or does it not matter?

    • Is it because we are only interest in the carrying amount of the asset at disposal? As that is the amount that would decrease the value of the asset? If so, ignore the above query.

  9. Hello sir,

    I wonder why “loan”(SFP) —-> “repayment of borrowings (SCFs)

    I think that Loan means that it not yet payment ==> (no cash out) Positive side.
    Repayment of borrowings means that this is cash out ===> Negative side.

    It’s really confusing, Pls help me. Thank you:)

  10. Do you think is it possible to have a question to prepare a Statements of Cash Flow in part C in my exam next week?

    I didn’t see any question from Statements of Cash Flow in part C since the new format of the exam started in September 2016.

  11. Good afternoon Sir,

    I find your lectures very informative and easy to follow, many thanks.

    I have had exactly the same question as Anna. The figures extracted from the SFP for PPE are at carrying value (i.e. cost less acc. dep.), hence the depreciation expense for the year would already have been accounted for when arriving at the c/f balance of £43,282 for the year; why therefore have you deducted the depreciation expense for the year a second time?

    Thank you again

  12. Hi Sir,
    i would like to know why the interest paid(finance cost) and dividend received (investment income) are still happening in the financing and investing activities column respectively when we have already involved them from the operating activities column.
    Thank you.

    • Finance costs and investment income been dealt with in the operating activities ONLY to find the profit before tax. Therefore, instead of deducting the finance costs, these have been added, while for the investment income these have been deducted.

      Consequently, finance costs and dividends received have been deducted and added back respectively under the correct heading, that is investing and financing.

  14. Hello Sir first of all I appreciate your way of teaching and thank you so much.
    Sir I want to go through all of your video lectures and after that I will practice question from one of the approved ACCA publishers.
    DO You recommend me this way of studying?

  15. Good evening!
    Could you please comment, how did we get Interest paid (400)?
    Out of Finance cost (the same figure, but with opposite sign 400)?

    Thank you in advance!

  16. Hi sir.
    if i deduct the dividend paid under the heading Cash flow from operating activities (that’s how we toughback in F3) will my answer be wrong?

  19. Hello Chris,
    I’ve a question on working out the balancing figure (acquisitions of PPE) on PPE a/c in example 1 chapter on SCFs.
    As far as I remember according to accounting standards we don’t show separately the historical cost of an asset and separately accumulated depreciation on the face of SFP. Instead the carrying value is presented. So, the amounts B/F and C/F for PPE presented on the face of SFP given in Ex1 must be the carrying values, aren’t they? However, when we work out the balancing figure for acquisitions of PPE we register depreciation expense for the year (on the credit side of PPE a/c ) as if the B/F and C/F amounts from SFP were original costs. Why do we have to put a depreciation there to work out the balancing figure if the B/F and C/F amounts are carrying values ? Please clarify. Thank you!

    • Hi,

      Yes, you’re correct in that the figure shown on the face of the SFP is the opening and closing carrying value of the PPE. The opening and closing alances are asset balances and hence the B/F is on the debit side, and C/F on the credit side.

      Don’t forget that the depreciation charge for the year is part of accumulated depreciation (DR Depreciation expense (SPL) CR Accumulated depreciation (SFP)) and the accumulated depreciation forms part of the carrying value (cost less accumulated depreciation).

      In that case any depreciation charged will reduce the carrying value and hence the credit entry in the T-account.

      Thanks

      • If the B/F and C/F amounts are already net of accumulated depreciation which includes the depreciation charge for the passing year – why do we deduct the depreciation charge for the year again while working out the missing figure? Isn’t it doubling? Tank you!

      • Good afternoon Sir,

        I find your lectures very informative and easy to follow, many thanks.

        I have had exactly the same question as Anna. The figures extracted from the SFP for PPE are at carrying value (i.e. cost less acc. dep.), hence the depreciation expense for the year would already have been accounted for when arriving at the c/f balance of £43,282 for the year; why therefore have you deducted the depreciation expense for the year a second time?

        Thank you again

      • hello,

        You do not deduct the depreciation twice. You start with the B/F figure and you work out the C/F figure. So you start with $26574 (B/F) and you see what hapend over the year in order to obtain C/F $43282. So you have depreciation of $4658 and disposal of $1974. This would give you a C/F figure of $19942. But the C/F amount in the SFP is $43282. This means that durring the year there must have been acquisitions of assets of $23340 (43282-19942)

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