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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Non- cash environmental provision
How do we treat the environmental provision in the statement of cash flows?
Hi,
When we make the initial provision then we need to remove it from the cash from operating activities as it is a non-cash item, similar to the way that we make the depreciation adjustment, so add back the provision to profits.
Then you can look at the movement in the provision each year, where if it then decreases we will deduct the decrease from the profit figure.
Thanks
