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Finance lease at the cash flow statement

HHesham9y ago
Hello Sir, At the cash flow statement, the increase at the finance lease obligation from the balance b/f to c/f represents a cash inflow – that is ok, whereas, the new finance lease (which supposed to be an increase) represents cash outflows !! for example: Non-current liabilities 31 March 2013 31 March 2012 8% loan notes 1,400 3,125 Deferred tax 1,500 800 Finance lease obligation 1,200 4,100 900 4,825 –––––– –––––– Current liabilities Finance lease obligation 750 600 Monty acquired additional plant under a finance lease that had a fair value of $1·5 million this date it also revalued its property upwards by $2 million and transferred $650,000 of the resulting revaluation reserve this created to deferred tax. There were no disposals of non-current assets during the period. Prepare a statement of cash flows for Monty for the year ended 31 March 2013 At the answer, the new finance lease of $1·5 million, considered as cash outflow (1,500) as followings :. Balances b/f – current (600) – non-current (900) New finance lease (1,500) Balances c/f – current 750 – non-current 1,200 –––––– Balance cash repayment (1,050) –––––– my question is : why the New finance lease of (1,500) treated differently as cash outflow, whereas, the increased finance lease of (1200-900) and (750-600) treated as cash inflow? Thanks
HHesham9y ago#1
I am sorry, please ignore the question Thanks
P2-D2P2-D2Tutor9y ago#2
OK. Hope you've managed to understand it all. Thanks
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