the disadvantage of Cash flows

This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.

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May 27, 2015 at 8:55 pm #249696
rustamrakhmatov27
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The main disadvantage of cash flows is the Opportunity to reclassify some cash outflows/inflows from operating activities to investing activities.
E.g. Capitalisation of expenses.
Could you explain and give more examples, please Mr Moffat.
May 28, 2015 at 9:00 am #249760
John Moffat
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No!

I don’t know where you read this, but unless you have quoted it out of context then it is nonsense. The opportunity exists to classify things wrongly in all the financial statements, but that is not a disadvantage of producing the statements in the first place!
May 28, 2015 at 8:20 pm #249991
rustamrakhmatov27
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😀 haha it’s bpp kit!
Thank you, Ive learnt that????
Maybe they mean the possibility of capitalizing for example car instead of including it as a running cost and trying to manipulate the np? Or is it anyway a mistake that is detected by some governmental taxation body?? Comment please:)
May 28, 2015 at 8:42 pm #250010
John Moffat
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It may be in BPP, but what they write is not always correct! (Their revision kits are full of errors)

I have no other comment than what I wrote before – any statements can be manipulated if people are not honest. But it is not really of any relevance for Paper F3!
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