Hi Stephen
Can you suggest what items should be recognised in cash flow statement if questions comes related to pension (benefit and contribution) and share based payment ( option and SARS)
Kind regards
Syed
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PENSION SCHEME AND SHARE BASED PAYMENT
4y ago#1Pension:
1. Operating cash flows - ADD BACK WHATEVER HAS BEEN CHARGED IN THE P&L (non-cash item)
2. Operating cash flows - DEDUCT CONTRIBUTIONS PAID
SBP
Equity settled - add back SBP expense
Cash settled - add back SBP expense
If options / SARs are exercised there will be additional cash flows - I would just do what it says in the question.
Thanks Stephen for the reply
Just to clear myself what I understand from your answer is
Cash flow from pension scheme
Present and past service charges and finance cost needs to be added back. Contribution paid needs to be minus from operating cash flow
Cash flow from share based payment
Expenses related to them needs to be added back to operating cash flow
Correct me if I am wrong
Also can you please explain what will be the impact on cash flow if option and SARS are exercised
Kind regards
4y ago#3Exercise of SARs / option
SARs - company pays out cash - operating outflow
Option - Company receives cash when employee pays exercise price - financing inflow
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