IAS 7Workpapers (Step 4 of 5)

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IAS 7 Statement of Cash Flows — wording before IFRS 18Applicable today

Applies to annual periods beginning before January 1, 2027.

WorkpaperIAS 7 — Statement of Cash FlowsL1 · L2 · L3 · L4

Statement of cash flows worksheet

4 missions13 sections to document60 min

Prepared by: AI-assisted draft
Reviewed by: Not reviewed — human review required
Status: Published

Objective of the workpaper

From the opening and closing statements of financial position, the statement of profit or loss and the additional information, rebuild the operating section with the indirect method (starting point used: profit before tax, wording before IFRS 18) and, where the data allow, with the direct method, derive the investing and financing cash flows from the balances, classify interest, dividends and taxes under the entity's method, leave out non-cash transactions, then reconcile the net change with opening and closing cash. Negative subtotals are net outflows.

13 sections · 124 blocks · 21 calculations · 9 entries

IAS 7 §10
IAS 7 §11
IAS 7 §14
IAS 7 §16
IAS 7 §17
IAS 7 §43
IAS 7 §44
IAS 7 §18
IAS 7 §20
IAS 7 §19
IAS 7 §31
IAS 7 §32
IAS 7 §35
IAS 7 §33
IAS 7 §34
IAS 7 §36
IAS 7 §6
IAS 7 §28

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

4 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity

Rebuilding a distributor's receipts and payments (direct method)

Case tasks documented here

Compute the cash received from customers.
Compute the purchases of the period and the cash paid to suppliers.
Compute the cash paid to employees.
Present the operating section down to the net cash flow and check it with the indirect method.
Present the entries for the payment of tax and interest.

Inputs

Entity, period, presentation currency and method used for operating cash flows
TextRequired
MAISON_TERNAVAL_20X5_DIRECT_METHOD_EUR
Cash and cash equivalents at the beginning of the period (statement amount)
Number
Cash and cash equivalents at the end of the period (cash analysis)
Number
Profit before tax for the period
NumberRequired
330,000
Teaching assumption: the case starts from profit before tax, which amounts to adding back the tax expense and deducting the tax paid; the indirect method starts from profit or loss (para. 18 and 20, wording before IFRS 18).
Depreciation of property, plant and equipment
Number
150,000
Other depreciation and amortisation (right-of-use assets, intangible assets)
Number
Impairment losses on property, plant and equipment
Number
Net charge to provisions (charges − reversals)
Number
30,000
Unrealised foreign exchange losses included in profit
Number
Unrealised foreign exchange gains included in profit
Number
Share of profit of associates (equity method)
Number
Interest expense recognised in profit or loss
Number
40,000
Teaching assumption: interest expense is added back in cash generated, then interest paid is presented under the entity's classification method.
Interest portion of the lease payments of the period
Number
Gain on disposal of property, plant and equipment
Number
Loss on disposal of property, plant and equipment
Number
Gain on disposal of subsidiaries included in profit
Number
Trade receivables at the beginning of the period
Number
640,000
Trade receivables at the end of the period
Number
715,000
Inventories at the beginning of the period
Number
820,000
Inventories at the end of the period
Number
905,000
Trade payables at the beginning of the period
Number
510,000
Trade payables at the end of the period
Number
548,000
Employee benefit payables at the beginning of the period
Number
82,000
Employee benefit payables at the end of the period
Number
95,000
Trade receivables of subsidiaries acquired (date control obtained)
Number
Trade receivables of subsidiaries disposed of (date control lost)
Number
Inventories of subsidiaries acquired (date control obtained)
Number
Inventories of subsidiaries disposed of (date control lost)
Number
Trade payables of subsidiaries acquired (date control obtained)
Number
Trade payables of subsidiaries disposed of (date control lost)
Number
Revenue
NumberRequired
5,200,000
Receivables written off in the period
Number
Cost of sales excluding depreciation
NumberRequired
3,380,000
Employee benefits expense
NumberRequired
960,000
Other operating expenses paid
Number
310,000
Dividends received in the period (amount determined in the group file)
Number
Property, plant and equipment at the beginning of the period (carrying amount)
NumberRequired
Property, plant and equipment at the end of the period (carrying amount)
NumberRequired
Cost of the assets disposed of
Number
Accumulated depreciation of the assets disposed of
Number
Carrying amount of the assets disposed of
Number
Property, plant and equipment derecognised with subsidiaries disposed of
Number
Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets)
Number
Rule: an acquisition financed by a lease, by assuming a liability or as part of obtaining control is not an investing payment (para. 43 and 44); assets of subsidiaries acquired belong to the acquisition of subsidiaries line (group cash flows workpaper).
Increase in carrying amount from a revaluation
Number
Disposal proceeds still receivable at the end of the period
Number
Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper)
Number
Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper)
Number
Other investing receipts
Number
Other investing payments (investments that are not cash equivalents)
Number
Borrowings at the beginning of the period
NumberRequired
Borrowings at the end of the period
NumberRequired
New borrowings received in cash
Number
Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest)
Number
Non-cash decreases in borrowings (conversion into equity, exchange differences)
Number
Increase in share capital and premium in the period
Number
Non-cash share issues (conversion, consideration for an acquisition)
Number
Share issue costs paid separately
Number
Lease payments of the period (total)
Number
Principal portion of the lease payments (financing liabilities reconciliation)
Number
Other financing receipts
Number
Other financing payments (purchases of non-controlling interests…)
Number
Interest payable at the beginning of the period
Number
Interest payable at the end of the period
Number
Interest capitalised in the cost of an asset
Number
Non-cash interest (unwinding of discount, interest added to the debt)
Number
Dividends payable at the beginning of the period
Number
Dividends declared in the period
Number
Dividends payable at the end of the period
Number
Dividends settled in shares
Number
Current tax payable at the beginning of the period
Number
30,000
Current tax expense for the period
Number
85,000
Current tax payable of subsidiaries acquired
Number
Current tax payable at the end of the period
Number
25,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Classification of cash flows and non-cash transactions

Analysis

IAS 7 §10IAS 7 §11IAS 7 §14IAS 7 §16IAS 7 §17IAS 7 §43IAS 7 §44

Points reviewed
ChecklistRequired
- Cash flows classified by operating, investing and financing activities
- Disposal proceeds in investing, gain removed from operating cash flow
- Only expenditures that result in a recognised asset are classified as investing
- Share issues, borrowings, repayments and principal portion of lease payments in financing
- Non-cash transactions excluded from the statement and disclosed elsewhere

Operating cash flows: indirect method (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §20IAS 7 §14

Change in trade receivables (cash effect)
Calculation
-75,000
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; − Trade receivables at the end of the period
Calculation method (consequence of paras. 39, 41 and 42: obtaining or losing control is a single investing line, net of the cash acquired or disposed of, with the assets and liabilities involved detailed in the notes, para. 40): balances of subsidiaries acquired or disposed of are neutralised in the changes, their effect belonging to the acquisition and disposal of subsidiaries lines (group cash flows workpaper).
Change in inventories (cash effect)
Calculation
-85,000
Inventories at the beginning of the period ; Inventories of subsidiaries acquired (date control obtained) ; − Inventories of subsidiaries disposed of (date control lost) ; − Inventories at the end of the period
Change in trade payables (cash effect)
Calculation
38,000
Trade payables at the end of the period ; − Trade payables at the beginning of the period ; − Trade payables of subsidiaries acquired (date control obtained) ; Trade payables of subsidiaries disposed of (date control lost)
Change in employee benefit payables (cash effect)
Calculation
13,000
Employee benefit payables at the end of the period ; − Employee benefit payables at the beginning of the period
Non-cash items (total)
Calculation
180,000
Depreciation of property, plant and equipment ; Other depreciation and amortisation (right-of-use assets, intangible assets) ; Impairment losses on property, plant and equipment ; Net charge to provisions (charges − reversals) ; Unrealised foreign exchange losses included in profit ; − Unrealised foreign exchange gains included in profit ; − Share of profit of associates (equity method)
Cash generated from operations (before interest and taxes paid)
CalculationRequired
441,000
Profit before tax for the period ; Non-cash items (total) ; Interest expense recognised in profit or loss ; − Gain on disposal of property, plant and equipment ; Loss on disposal of property, plant and equipment ; − Gain on disposal of subsidiaries included in profit ; Change in trade receivables (cash effect) ; Change in inventories (cash effect) ; Change in trade payables (cash effect) ; Change in employee benefit payables (cash effect)

Operating cash flows: direct method (cross-check) (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §19

Cash received from customers
Calculation
5,125,000
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; Revenue ; − Trade receivables at the end of the period ; − Receivables written off in the period
Cash paid to suppliers
Calculation
3,427,000
Cost of sales excluding depreciation ; Inventories at the end of the period ; − Inventories at the beginning of the period ; − Inventories of subsidiaries acquired (date control obtained) ; Inventories of subsidiaries disposed of (date control lost) ; Trade payables at the beginning of the period ; Trade payables of subsidiaries acquired (date control obtained) ; − Trade payables of subsidiaries disposed of (date control lost) ; − Trade payables at the end of the period
Cash paid to employees
Calculation
947,000
Employee benefits expense ; Employee benefit payables at the beginning of the period ; − Employee benefit payables at the end of the period

Investing cash flows

Calculations

IAS 7 §16IAS 7 §43

Proceeds from disposal of property, plant and equipment
Calculation
0
Carrying amount of the assets disposed of ; Gain on disposal of property, plant and equipment ; − Loss on disposal of property, plant and equipment ; − Disposal proceeds still receivable at the end of the period
Purchases of property, plant and equipment paid
CalculationRequired
Property, plant and equipment at the end of the period (carrying amount) ; − Property, plant and equipment at the beginning of the period (carrying amount) ; Depreciation of property, plant and equipment ; Impairment losses on property, plant and equipment ; Carrying amount of the assets disposed of ; Property, plant and equipment derecognised with subsidiaries disposed of ; − Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets) ; − Increase in carrying amount from a revaluation

Interest, dividends and taxes paid (wording before IFRS 18)

Calculations

IAS 7 §31IAS 7 §32IAS 7 §35

Total interest paid (including interest capitalised)
Calculation
40,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; Interest capitalised in the cost of an asset ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt)
Interest paid through interest payable (excluding lease and capitalised interest)
Calculation
40,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt) ; − Interest portion of the lease payments of the period
Dividends paid
Calculation
0
Dividends payable at the beginning of the period ; Dividends declared in the period ; − Dividends payable at the end of the period ; − Dividends settled in shares
Income taxes paid
Calculation
90,000
Current tax payable at the beginning of the period ; Current tax expense for the period ; Current tax payable of subsidiaries acquired ; − Current tax payable at the end of the period

Statement of cash flows and reconciliation of cash

Calculations

IAS 7 §10IAS 7 §17IAS 7 §18IAS 7 §28

Net cash from operating activities
CalculationRequired
311,000
Cash generated from operations (before interest and taxes paid) ; − Interest paid classified as operating ; − Dividends paid classified as operating ; Dividends received classified as operating ; − Taxes paid classified as operating
Net cash from investing activities
CalculationRequired
Proceeds from disposal of property, plant and equipment ; − Purchases of property, plant and equipment paid ; − Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper) ; Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper) ; Dividends received classified as investing ; Other investing receipts ; − Other investing payments (investments that are not cash equivalents) ; − Taxes paid identified with investing
Repayments of borrowings
CalculationRequired
Borrowings at the beginning of the period ; New borrowings received in cash ; Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest) ; − Non-cash decreases in borrowings (conversion into equity, exchange differences) ; − Borrowings at the end of the period
Proceeds from issuing shares
Calculation
0
Increase in share capital and premium in the period ; − Non-cash share issues (conversion, consideration for an acquisition) ; − Share issue costs paid separately
Net cash from financing activities
CalculationRequired
Proceeds from issuing shares ; New borrowings received in cash ; − Repayments of borrowings ; − Principal portion of the lease payments (financing liabilities reconciliation) ; Other financing receipts ; − Other financing payments (purchases of non-controlling interests…) ; − Interest paid classified as financing ; − Dividends paid classified as financing ; − Taxes paid identified with financing
Net increase (decrease) in cash and cash equivalents
Calculation
Net cash from operating activities ; Net cash from investing activities ; Net cash from financing activities
Effect of exchange rate changes on cash (cash analysis; negative for a loss)
Number
Amount taken from the cash analysis: the exchange effect is presented separately from the three activities to reconcile opening and closing cash (para. 28).

Entries of the underlying transactions (link to the cash flows)

Entries

Disposal of an asset at a gain
Entry
Debit Cash ← Proceeds from disposal of property, plant and equipment ; Debit Accumulated depreciation ← Accumulated depreciation of the assets disposed of ; Credit Property, plant and equipment (cost) ← Cost of the assets disposed of ; Credit Gain on disposal ← Gain on disposal of property, plant and equipment
Purchase of assets paid in cash
Entry
Debit Property, plant and equipment (cost) ← Purchases of property, plant and equipment paid ; Credit Cash ← Purchases of property, plant and equipment paid
Payment of accrued interest
Entry
Account Debit Credit
Interest payable 40,000
Cash 40,000
Interest paid capitalised in an asset under construction
Entry
Debit Asset under construction ← Interest capitalised in the cost of an asset ; Credit Cash ← Interest capitalised in the cost of an asset
Lessee's lease payment
Entry
Debit Lease liability ← Principal portion of the lease payments (financing liabilities reconciliation) ; Debit Interest expense ← Interest portion of the lease payments of the period ; Credit Cash ← Lease payments of the period (total)
Payment of dividends
Entry
Debit Dividends payable ← Dividends paid ; Credit Cash ← Dividends paid
Payment of current tax
Entry
Account Debit Credit
Current tax payable 90,000
Cash 90,000
Drawdown of a loan
Entry
Debit Cash ← New borrowings received in cash ; Credit Borrowings ← New borrowings received in cash
Issue of shares for cash
Entry
Debit Cash ← Proceeds from issuing shares ; Credit Share capital and premium ← Proceeds from issuing shares

Account	Debit	Credit
Interest payable	40,000
Cash		40,000

Account	Debit	Credit
Current tax payable	90,000
Cash		90,000

Classification of interest, dividends, taxes and ambiguous cash flows (wording before IFRS 18)

Judgment

IAS 7 §31IAS 7 §33IAS 7 §34IAS 7 §35IAS 7 §36IAS 7 §6IAS 7 §14IAS 7 §16

The entity's method for classifying interest and dividends (wording before IFRS 18)
JudgmentRequired
Interest paid in operating, dividends paid in financing
Interest paid in operating, dividends paid in financing / Interest paid and dividends paid in financing / Interest paid and dividends paid in operating / Interest paid in financing, dividends paid in operating
Professional judgement within the standard: for an entity other than a financial institution, the options in para. 33 and 34 (wording before IFRS 18) are choices of the entity; the method in the case is case data, applied consistently (para. 31).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Classification of taxes paid
JudgmentRequired
Entirely in operating activities (general case)
Entirely in operating activities (general case) / Partly specifically identified with investing or financing
Rule: taxes in operating unless specifically identified with investing or financing; where taxes are split, the total of taxes paid is disclosed (para. 35 and 36, wording before IFRS 18).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Cash flows that are ambiguous under the definitions
JudgmentRequired
No ambiguous cash flow
Classified under the standard's definitions and examples / Classification driven by the entity's main activity / No ambiguous cash flow
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Interest paid classified as operating
Number
40,000
Interest paid classified as financing
Number
0
Dividends paid classified as operating
Number
Dividends paid classified as financing
Number
Dividends received classified as operating
Number
Dividends received classified as investing
Number
Taxes paid classified as operating
Number
90,000
Taxes paid identified with investing
Number
0
Taxes paid identified with financing
Number
0

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Conclusion

Statement finalised, cash reconciliation, classification methods and points submitted to the reviewer
ConclusionRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References

Checks and financial statement impact

Closing cash = opening cash + net change + exchange effectNot evaluated
Direct and indirect methods agree (receipts from customers = cash generated + payments)Pass
Interest paid fully classifiedPass
Dividends paid fully classifiedNot evaluated
Taxes paid fully classifiedPass
Classification method documentedPass
Classification of taxes documentedPass

Assets: -130,000
Liabilities: -130,000
Profit or loss: 0
OCI: 0
Equity: 0

File and entity

An industrial SME's statement under the indirect method: sale of a machine, provisions and tax

Case tasks documented here

Compute the cash effect of the changes in working capital.
Compute the non-cash items.
Compute the interest paid.
Compute the tax paid.
Determine the cash generated from operations and the net operating cash flow.
Compute the proceeds from the sale of the press.
Compute the cash paid to purchase property, plant and equipment.
Assemble the statement and reconcile cash.
Present the entries for the disposal, the payment of tax and interest, the purchase and the dividend.

Inputs

Entity, period, presentation currency and method used for operating cash flows
TextRequired
FONDERIE_ARDANEL_20X5_INDIRECT_METHOD_EUR
Cash and cash equivalents at the beginning of the period (statement amount)
Number
214,000
Cash and cash equivalents at the end of the period (cash analysis)
Number
300,000
Profit before tax for the period
NumberRequired
620,000
Teaching assumption: the case starts from profit before tax, which amounts to adding back the tax expense and deducting the tax paid; the indirect method starts from profit or loss (para. 18 and 20, wording before IFRS 18).
Depreciation of property, plant and equipment
Number
280,000
Other depreciation and amortisation (right-of-use assets, intangible assets)
Number
Impairment losses on property, plant and equipment
Number
Net charge to provisions (charges − reversals)
Number
45,000
Unrealised foreign exchange losses included in profit
Number
Unrealised foreign exchange gains included in profit
Number
Share of profit of associates (equity method)
Number
Interest expense recognised in profit or loss
Number
54,000
Teaching assumption: interest expense is added back in cash generated, then interest paid is presented under the entity's classification method.
Interest portion of the lease payments of the period
Number
Gain on disposal of property, plant and equipment
Number
35,000
Loss on disposal of property, plant and equipment
Number
Gain on disposal of subsidiaries included in profit
Number
Trade receivables at the beginning of the period
Number
1,120,000
Trade receivables at the end of the period
Number
1,210,000
Inventories at the beginning of the period
Number
860,000
Inventories at the end of the period
Number
815,000
Trade payables at the beginning of the period
Number
640,000
Trade payables at the end of the period
Number
600,000
Employee benefit payables at the beginning of the period
Number
Employee benefit payables at the end of the period
Number
Trade receivables of subsidiaries acquired (date control obtained)
Number
Trade receivables of subsidiaries disposed of (date control lost)
Number
Inventories of subsidiaries acquired (date control obtained)
Number
Inventories of subsidiaries disposed of (date control lost)
Number
Trade payables of subsidiaries acquired (date control obtained)
Number
Trade payables of subsidiaries disposed of (date control lost)
Number
Revenue
NumberRequired
Receivables written off in the period
Number
Cost of sales excluding depreciation
NumberRequired
Employee benefits expense
NumberRequired
Other operating expenses paid
Number
Dividends received in the period (amount determined in the group file)
Number
Property, plant and equipment at the beginning of the period (carrying amount)
NumberRequired
3,200,000
Property, plant and equipment at the end of the period (carrying amount)
NumberRequired
3,450,000
Cost of the assets disposed of
Number
400,000
Accumulated depreciation of the assets disposed of
Number
310,000
Carrying amount of the assets disposed of
Number
90,000
Property, plant and equipment derecognised with subsidiaries disposed of
Number
Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets)
Number
70,000
Rule: an acquisition financed by a lease, by assuming a liability or as part of obtaining control is not an investing payment (para. 43 and 44); assets of subsidiaries acquired belong to the acquisition of subsidiaries line (group cash flows workpaper).
Increase in carrying amount from a revaluation
Number
Disposal proceeds still receivable at the end of the period
Number
Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper)
Number
Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper)
Number
Other investing receipts
Number
Other investing payments (investments that are not cash equivalents)
Number
Borrowings at the beginning of the period
NumberRequired
900,000
Borrowings at the end of the period
NumberRequired
780,000
New borrowings received in cash
Number
Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest)
Number
Non-cash decreases in borrowings (conversion into equity, exchange differences)
Number
Increase in share capital and premium in the period
Number
Non-cash share issues (conversion, consideration for an acquisition)
Number
Share issue costs paid separately
Number
Lease payments of the period (total)
Number
Principal portion of the lease payments (financing liabilities reconciliation)
Number
Other financing receipts
Number
Other financing payments (purchases of non-controlling interests…)
Number
Interest payable at the beginning of the period
Number
12,000
Interest payable at the end of the period
Number
18,000
Interest capitalised in the cost of an asset
Number
Non-cash interest (unwinding of discount, interest added to the debt)
Number
Dividends payable at the beginning of the period
Number
Dividends declared in the period
Number
60,000
Dividends payable at the end of the period
Number
Dividends settled in shares
Number
Current tax payable at the beginning of the period
Number
60,000
Current tax expense for the period
Number
150,000
Current tax payable of subsidiaries acquired
Number
Current tax payable at the end of the period
Number
70,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Classification of cash flows and non-cash transactions

Analysis

IAS 7 §10IAS 7 §11IAS 7 §14IAS 7 §16IAS 7 §17IAS 7 §43IAS 7 §44

Points reviewed
ChecklistRequired
- Cash flows classified by operating, investing and financing activities
- Disposal proceeds in investing, gain removed from operating cash flow
- Only expenditures that result in a recognised asset are classified as investing
- Share issues, borrowings, repayments and principal portion of lease payments in financing
- Non-cash transactions excluded from the statement and disclosed elsewhere

Operating cash flows: indirect method (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §20IAS 7 §14

Change in trade receivables (cash effect)
Calculation
-90,000
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; − Trade receivables at the end of the period
Calculation method (consequence of paras. 39, 41 and 42: obtaining or losing control is a single investing line, net of the cash acquired or disposed of, with the assets and liabilities involved detailed in the notes, para. 40): balances of subsidiaries acquired or disposed of are neutralised in the changes, their effect belonging to the acquisition and disposal of subsidiaries lines (group cash flows workpaper).
Change in inventories (cash effect)
Calculation
45,000
Inventories at the beginning of the period ; Inventories of subsidiaries acquired (date control obtained) ; − Inventories of subsidiaries disposed of (date control lost) ; − Inventories at the end of the period
Change in trade payables (cash effect)
Calculation
-40,000
Trade payables at the end of the period ; − Trade payables at the beginning of the period ; − Trade payables of subsidiaries acquired (date control obtained) ; Trade payables of subsidiaries disposed of (date control lost)
Change in employee benefit payables (cash effect)
Calculation
0
Employee benefit payables at the end of the period ; − Employee benefit payables at the beginning of the period
Non-cash items (total)
Calculation
325,000
Depreciation of property, plant and equipment ; Other depreciation and amortisation (right-of-use assets, intangible assets) ; Impairment losses on property, plant and equipment ; Net charge to provisions (charges − reversals) ; Unrealised foreign exchange losses included in profit ; − Unrealised foreign exchange gains included in profit ; − Share of profit of associates (equity method)
Cash generated from operations (before interest and taxes paid)
CalculationRequired
879,000
Profit before tax for the period ; Non-cash items (total) ; Interest expense recognised in profit or loss ; − Gain on disposal of property, plant and equipment ; Loss on disposal of property, plant and equipment ; − Gain on disposal of subsidiaries included in profit ; Change in trade receivables (cash effect) ; Change in inventories (cash effect) ; Change in trade payables (cash effect) ; Change in employee benefit payables (cash effect)

Operating cash flows: direct method (cross-check) (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §19

Cash received from customers
Calculation
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; Revenue ; − Trade receivables at the end of the period ; − Receivables written off in the period
Cash paid to suppliers
Calculation
Cost of sales excluding depreciation ; Inventories at the end of the period ; − Inventories at the beginning of the period ; − Inventories of subsidiaries acquired (date control obtained) ; Inventories of subsidiaries disposed of (date control lost) ; Trade payables at the beginning of the period ; Trade payables of subsidiaries acquired (date control obtained) ; − Trade payables of subsidiaries disposed of (date control lost) ; − Trade payables at the end of the period
Cash paid to employees
Calculation
Employee benefits expense ; Employee benefit payables at the beginning of the period ; − Employee benefit payables at the end of the period

Investing cash flows

Calculations

IAS 7 §16IAS 7 §43

Proceeds from disposal of property, plant and equipment
Calculation
125,000
Carrying amount of the assets disposed of ; Gain on disposal of property, plant and equipment ; − Loss on disposal of property, plant and equipment ; − Disposal proceeds still receivable at the end of the period
Purchases of property, plant and equipment paid
CalculationRequired
550,000
Property, plant and equipment at the end of the period (carrying amount) ; − Property, plant and equipment at the beginning of the period (carrying amount) ; Depreciation of property, plant and equipment ; Impairment losses on property, plant and equipment ; Carrying amount of the assets disposed of ; Property, plant and equipment derecognised with subsidiaries disposed of ; − Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets) ; − Increase in carrying amount from a revaluation

Interest, dividends and taxes paid (wording before IFRS 18)

Calculations

IAS 7 §31IAS 7 §32IAS 7 §35

Total interest paid (including interest capitalised)
Calculation
48,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; Interest capitalised in the cost of an asset ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt)
Interest paid through interest payable (excluding lease and capitalised interest)
Calculation
48,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt) ; − Interest portion of the lease payments of the period
Dividends paid
Calculation
60,000
Dividends payable at the beginning of the period ; Dividends declared in the period ; − Dividends payable at the end of the period ; − Dividends settled in shares
Income taxes paid
Calculation
140,000
Current tax payable at the beginning of the period ; Current tax expense for the period ; Current tax payable of subsidiaries acquired ; − Current tax payable at the end of the period

Statement of cash flows and reconciliation of cash

Calculations

IAS 7 §10IAS 7 §17IAS 7 §18IAS 7 §28

Net cash from operating activities
CalculationRequired
691,000
Cash generated from operations (before interest and taxes paid) ; − Interest paid classified as operating ; − Dividends paid classified as operating ; Dividends received classified as operating ; − Taxes paid classified as operating
Net cash from investing activities
CalculationRequired
-425,000
Proceeds from disposal of property, plant and equipment ; − Purchases of property, plant and equipment paid ; − Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper) ; Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper) ; Dividends received classified as investing ; Other investing receipts ; − Other investing payments (investments that are not cash equivalents) ; − Taxes paid identified with investing
Repayments of borrowings
CalculationRequired
120,000
Borrowings at the beginning of the period ; New borrowings received in cash ; Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest) ; − Non-cash decreases in borrowings (conversion into equity, exchange differences) ; − Borrowings at the end of the period
Proceeds from issuing shares
Calculation
0
Increase in share capital and premium in the period ; − Non-cash share issues (conversion, consideration for an acquisition) ; − Share issue costs paid separately
Net cash from financing activities
CalculationRequired
-180,000
Proceeds from issuing shares ; New borrowings received in cash ; − Repayments of borrowings ; − Principal portion of the lease payments (financing liabilities reconciliation) ; Other financing receipts ; − Other financing payments (purchases of non-controlling interests…) ; − Interest paid classified as financing ; − Dividends paid classified as financing ; − Taxes paid identified with financing
Net increase (decrease) in cash and cash equivalents
Calculation
86,000
Net cash from operating activities ; Net cash from investing activities ; Net cash from financing activities
Effect of exchange rate changes on cash (cash analysis; negative for a loss)
Number
0
Amount taken from the cash analysis: the exchange effect is presented separately from the three activities to reconcile opening and closing cash (para. 28).

Entries of the underlying transactions (link to the cash flows)

Entries

Disposal of an asset at a gain
Entry
Account Debit Credit
Cash 125,000
Accumulated depreciation 310,000
Property, plant and equipment (cost) 400,000
Gain on disposal 35,000
Purchase of assets paid in cash
Entry
Account Debit Credit
Property, plant and equipment (cost) 550,000
Cash 550,000
Payment of accrued interest
Entry
Account Debit Credit
Interest payable 48,000
Cash 48,000
Interest paid capitalised in an asset under construction
Entry
Debit Asset under construction ← Interest capitalised in the cost of an asset ; Credit Cash ← Interest capitalised in the cost of an asset
Lessee's lease payment
Entry
Debit Lease liability ← Principal portion of the lease payments (financing liabilities reconciliation) ; Debit Interest expense ← Interest portion of the lease payments of the period ; Credit Cash ← Lease payments of the period (total)
Payment of dividends
Entry
Account Debit Credit
Dividends payable 60,000
Cash 60,000
Payment of current tax
Entry
Account Debit Credit
Current tax payable 140,000
Cash 140,000
Drawdown of a loan
Entry
Debit Cash ← New borrowings received in cash ; Credit Borrowings ← New borrowings received in cash
Issue of shares for cash
Entry
Debit Cash ← Proceeds from issuing shares ; Credit Share capital and premium ← Proceeds from issuing shares

Account	Debit	Credit
Cash	125,000
Accumulated depreciation	310,000
Property, plant and equipment (cost)		400,000
Gain on disposal		35,000

Account	Debit	Credit
Property, plant and equipment (cost)	550,000
Cash		550,000

Account	Debit	Credit
Interest payable	48,000
Cash		48,000

Account	Debit	Credit
Dividends payable	60,000
Cash		60,000

Account	Debit	Credit
Current tax payable	140,000
Cash		140,000

Classification of interest, dividends, taxes and ambiguous cash flows (wording before IFRS 18)

Judgment

IAS 7 §31IAS 7 §33IAS 7 §34IAS 7 §35IAS 7 §36IAS 7 §6IAS 7 §14IAS 7 §16

The entity's method for classifying interest and dividends (wording before IFRS 18)
JudgmentRequired
Interest paid in operating, dividends paid in financing
Interest paid in operating, dividends paid in financing / Interest paid and dividends paid in financing / Interest paid and dividends paid in operating / Interest paid in financing, dividends paid in operating
Professional judgement within the standard: for an entity other than a financial institution, the options in para. 33 and 34 (wording before IFRS 18) are choices of the entity; the method in the case is case data, applied consistently (para. 31).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Classification of taxes paid
JudgmentRequired
Entirely in operating activities (general case)
Entirely in operating activities (general case) / Partly specifically identified with investing or financing
Rule: taxes in operating unless specifically identified with investing or financing; where taxes are split, the total of taxes paid is disclosed (para. 35 and 36, wording before IFRS 18).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Cash flows that are ambiguous under the definitions
JudgmentRequired
Classified under the standard's definitions and examples
Classified under the standard's definitions and examples / Classification driven by the entity's main activity / No ambiguous cash flow
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Interest paid classified as operating
Number
48,000
Interest paid classified as financing
Number
0
Dividends paid classified as operating
Number
0
Dividends paid classified as financing
Number
60,000
Dividends received classified as operating
Number
Dividends received classified as investing
Number
Taxes paid classified as operating
Number
140,000
Taxes paid identified with investing
Number
0
Taxes paid identified with financing
Number
0

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Conclusion

Statement finalised, cash reconciliation, classification methods and points submitted to the reviewer
ConclusionRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References

Checks and financial statement impact

Closing cash = opening cash + net change + exchange effectPass
Direct and indirect methods agree (receipts from customers = cash generated + payments)Not evaluated
Interest paid fully classifiedPass
Dividends paid fully classifiedPass
Taxes paid fully classifiedPass
Classification method documentedPass
Classification of taxes documentedPass

Assets: -213,000
Liabilities: -248,000
Profit or loss: 35,000
OCI: 0
Equity: 35,000

File and entity

Interest, dividends and taxes: classification choices, capitalised interest and net presentation

Case tasks documented here

Compute total interest paid and the portion settled through interest payable.
Compute the dividends paid.
Compute the tax paid and its allocation.
Present the payment entries.

Inputs

Entity, period, presentation currency and method used for operating cash flows
TextRequired
BELLASTRE_HOTELS_20X5_INTEREST_DIVIDENDS_TAXES
Cash and cash equivalents at the beginning of the period (statement amount)
Number
Cash and cash equivalents at the end of the period (cash analysis)
Number
Profit before tax for the period
NumberRequired
Teaching assumption: the case starts from profit before tax, which amounts to adding back the tax expense and deducting the tax paid; the indirect method starts from profit or loss (para. 18 and 20, wording before IFRS 18).
Depreciation of property, plant and equipment
Number
Other depreciation and amortisation (right-of-use assets, intangible assets)
Number
Impairment losses on property, plant and equipment
Number
Net charge to provisions (charges − reversals)
Number
Unrealised foreign exchange losses included in profit
Number
Unrealised foreign exchange gains included in profit
Number
Share of profit of associates (equity method)
Number
Interest expense recognised in profit or loss
Number
180,000
Teaching assumption: interest expense is added back in cash generated, then interest paid is presented under the entity's classification method.
Interest portion of the lease payments of the period
Number
Gain on disposal of property, plant and equipment
Number
Loss on disposal of property, plant and equipment
Number
Gain on disposal of subsidiaries included in profit
Number
Trade receivables at the beginning of the period
Number
Trade receivables at the end of the period
Number
Inventories at the beginning of the period
Number
Inventories at the end of the period
Number
Trade payables at the beginning of the period
Number
Trade payables at the end of the period
Number
Employee benefit payables at the beginning of the period
Number
Employee benefit payables at the end of the period
Number
Trade receivables of subsidiaries acquired (date control obtained)
Number
Trade receivables of subsidiaries disposed of (date control lost)
Number
Inventories of subsidiaries acquired (date control obtained)
Number
Inventories of subsidiaries disposed of (date control lost)
Number
Trade payables of subsidiaries acquired (date control obtained)
Number
Trade payables of subsidiaries disposed of (date control lost)
Number
Revenue
NumberRequired
Receivables written off in the period
Number
Cost of sales excluding depreciation
NumberRequired
Employee benefits expense
NumberRequired
Other operating expenses paid
Number
Dividends received in the period (amount determined in the group file)
Number
Property, plant and equipment at the beginning of the period (carrying amount)
NumberRequired
Property, plant and equipment at the end of the period (carrying amount)
NumberRequired
Cost of the assets disposed of
Number
Accumulated depreciation of the assets disposed of
Number
Carrying amount of the assets disposed of
Number
Property, plant and equipment derecognised with subsidiaries disposed of
Number
Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets)
Number
Rule: an acquisition financed by a lease, by assuming a liability or as part of obtaining control is not an investing payment (para. 43 and 44); assets of subsidiaries acquired belong to the acquisition of subsidiaries line (group cash flows workpaper).
Increase in carrying amount from a revaluation
Number
Disposal proceeds still receivable at the end of the period
Number
Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper)
Number
Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper)
Number
Other investing receipts
Number
Other investing payments (investments that are not cash equivalents)
Number
Borrowings at the beginning of the period
NumberRequired
Borrowings at the end of the period
NumberRequired
New borrowings received in cash
Number
Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest)
Number
Non-cash decreases in borrowings (conversion into equity, exchange differences)
Number
Increase in share capital and premium in the period
Number
Non-cash share issues (conversion, consideration for an acquisition)
Number
Share issue costs paid separately
Number
Lease payments of the period (total)
Number
Principal portion of the lease payments (financing liabilities reconciliation)
Number
Other financing receipts
Number
Other financing payments (purchases of non-controlling interests…)
Number
Interest payable at the beginning of the period
Number
25,000
Interest payable at the end of the period
Number
35,000
Interest capitalised in the cost of an asset
Number
60,000
Non-cash interest (unwinding of discount, interest added to the debt)
Number
8,000
Dividends payable at the beginning of the period
Number
40,000
Dividends declared in the period
Number
300,000
Dividends payable at the end of the period
Number
70,000
Dividends settled in shares
Number
50,000
Current tax payable at the beginning of the period
Number
90,000
Current tax expense for the period
Number
260,000
Current tax payable of subsidiaries acquired
Number
Current tax payable at the end of the period
Number
110,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Classification of cash flows and non-cash transactions

Analysis

IAS 7 §10IAS 7 §11IAS 7 §14IAS 7 §16IAS 7 §17IAS 7 §43IAS 7 §44

Points reviewed
ChecklistRequired
- Cash flows classified by operating, investing and financing activities
- Disposal proceeds in investing, gain removed from operating cash flow
- Only expenditures that result in a recognised asset are classified as investing
- Share issues, borrowings, repayments and principal portion of lease payments in financing
- Non-cash transactions excluded from the statement and disclosed elsewhere

Operating cash flows: indirect method (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §20IAS 7 §14

Change in trade receivables (cash effect)
Calculation
0
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; − Trade receivables at the end of the period
Calculation method (consequence of paras. 39, 41 and 42: obtaining or losing control is a single investing line, net of the cash acquired or disposed of, with the assets and liabilities involved detailed in the notes, para. 40): balances of subsidiaries acquired or disposed of are neutralised in the changes, their effect belonging to the acquisition and disposal of subsidiaries lines (group cash flows workpaper).
Change in inventories (cash effect)
Calculation
0
Inventories at the beginning of the period ; Inventories of subsidiaries acquired (date control obtained) ; − Inventories of subsidiaries disposed of (date control lost) ; − Inventories at the end of the period
Change in trade payables (cash effect)
Calculation
0
Trade payables at the end of the period ; − Trade payables at the beginning of the period ; − Trade payables of subsidiaries acquired (date control obtained) ; Trade payables of subsidiaries disposed of (date control lost)
Change in employee benefit payables (cash effect)
Calculation
0
Employee benefit payables at the end of the period ; − Employee benefit payables at the beginning of the period
Non-cash items (total)
Calculation
0
Depreciation of property, plant and equipment ; Other depreciation and amortisation (right-of-use assets, intangible assets) ; Impairment losses on property, plant and equipment ; Net charge to provisions (charges − reversals) ; Unrealised foreign exchange losses included in profit ; − Unrealised foreign exchange gains included in profit ; − Share of profit of associates (equity method)
Cash generated from operations (before interest and taxes paid)
CalculationRequired
Profit before tax for the period ; Non-cash items (total) ; Interest expense recognised in profit or loss ; − Gain on disposal of property, plant and equipment ; Loss on disposal of property, plant and equipment ; − Gain on disposal of subsidiaries included in profit ; Change in trade receivables (cash effect) ; Change in inventories (cash effect) ; Change in trade payables (cash effect) ; Change in employee benefit payables (cash effect)

Operating cash flows: direct method (cross-check) (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §19

Cash received from customers
Calculation
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; Revenue ; − Trade receivables at the end of the period ; − Receivables written off in the period
Cash paid to suppliers
Calculation
Cost of sales excluding depreciation ; Inventories at the end of the period ; − Inventories at the beginning of the period ; − Inventories of subsidiaries acquired (date control obtained) ; Inventories of subsidiaries disposed of (date control lost) ; Trade payables at the beginning of the period ; Trade payables of subsidiaries acquired (date control obtained) ; − Trade payables of subsidiaries disposed of (date control lost) ; − Trade payables at the end of the period
Cash paid to employees
Calculation
Employee benefits expense ; Employee benefit payables at the beginning of the period ; − Employee benefit payables at the end of the period

Investing cash flows

Calculations

IAS 7 §16IAS 7 §43

Proceeds from disposal of property, plant and equipment
Calculation
0
Carrying amount of the assets disposed of ; Gain on disposal of property, plant and equipment ; − Loss on disposal of property, plant and equipment ; − Disposal proceeds still receivable at the end of the period
Purchases of property, plant and equipment paid
CalculationRequired
Property, plant and equipment at the end of the period (carrying amount) ; − Property, plant and equipment at the beginning of the period (carrying amount) ; Depreciation of property, plant and equipment ; Impairment losses on property, plant and equipment ; Carrying amount of the assets disposed of ; Property, plant and equipment derecognised with subsidiaries disposed of ; − Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets) ; − Increase in carrying amount from a revaluation

Interest, dividends and taxes paid (wording before IFRS 18)

Calculations

IAS 7 §31IAS 7 §32IAS 7 §35

Total interest paid (including interest capitalised)
Calculation
222,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; Interest capitalised in the cost of an asset ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt)
Interest paid through interest payable (excluding lease and capitalised interest)
Calculation
162,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt) ; − Interest portion of the lease payments of the period
Dividends paid
Calculation
220,000
Dividends payable at the beginning of the period ; Dividends declared in the period ; − Dividends payable at the end of the period ; − Dividends settled in shares
Income taxes paid
Calculation
240,000
Current tax payable at the beginning of the period ; Current tax expense for the period ; Current tax payable of subsidiaries acquired ; − Current tax payable at the end of the period

Statement of cash flows and reconciliation of cash

Calculations

IAS 7 §10IAS 7 §17IAS 7 §18IAS 7 §28

Net cash from operating activities
CalculationRequired
Cash generated from operations (before interest and taxes paid) ; − Interest paid classified as operating ; − Dividends paid classified as operating ; Dividends received classified as operating ; − Taxes paid classified as operating
Net cash from investing activities
CalculationRequired
Proceeds from disposal of property, plant and equipment ; − Purchases of property, plant and equipment paid ; − Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper) ; Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper) ; Dividends received classified as investing ; Other investing receipts ; − Other investing payments (investments that are not cash equivalents) ; − Taxes paid identified with investing
Repayments of borrowings
CalculationRequired
Borrowings at the beginning of the period ; New borrowings received in cash ; Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest) ; − Non-cash decreases in borrowings (conversion into equity, exchange differences) ; − Borrowings at the end of the period
Proceeds from issuing shares
Calculation
0
Increase in share capital and premium in the period ; − Non-cash share issues (conversion, consideration for an acquisition) ; − Share issue costs paid separately
Net cash from financing activities
CalculationRequired
Proceeds from issuing shares ; New borrowings received in cash ; − Repayments of borrowings ; − Principal portion of the lease payments (financing liabilities reconciliation) ; Other financing receipts ; − Other financing payments (purchases of non-controlling interests…) ; − Interest paid classified as financing ; − Dividends paid classified as financing ; − Taxes paid identified with financing
Net increase (decrease) in cash and cash equivalents
Calculation
Net cash from operating activities ; Net cash from investing activities ; Net cash from financing activities
Effect of exchange rate changes on cash (cash analysis; negative for a loss)
Number
Amount taken from the cash analysis: the exchange effect is presented separately from the three activities to reconcile opening and closing cash (para. 28).

Entries of the underlying transactions (link to the cash flows)

Entries

Disposal of an asset at a gain
Entry
Debit Cash ← Proceeds from disposal of property, plant and equipment ; Debit Accumulated depreciation ← Accumulated depreciation of the assets disposed of ; Credit Property, plant and equipment (cost) ← Cost of the assets disposed of ; Credit Gain on disposal ← Gain on disposal of property, plant and equipment
Purchase of assets paid in cash
Entry
Debit Property, plant and equipment (cost) ← Purchases of property, plant and equipment paid ; Credit Cash ← Purchases of property, plant and equipment paid
Payment of accrued interest
Entry
Account Debit Credit
Interest payable 162,000
Cash 162,000
Interest paid capitalised in an asset under construction
Entry
Account Debit Credit
Asset under construction 60,000
Cash 60,000
Lessee's lease payment
Entry
Debit Lease liability ← Principal portion of the lease payments (financing liabilities reconciliation) ; Debit Interest expense ← Interest portion of the lease payments of the period ; Credit Cash ← Lease payments of the period (total)
Payment of dividends
Entry
Account Debit Credit
Dividends payable 220,000
Cash 220,000
Payment of current tax
Entry
Account Debit Credit
Current tax payable 240,000
Cash 240,000
Drawdown of a loan
Entry
Debit Cash ← New borrowings received in cash ; Credit Borrowings ← New borrowings received in cash
Issue of shares for cash
Entry
Debit Cash ← Proceeds from issuing shares ; Credit Share capital and premium ← Proceeds from issuing shares

Account	Debit	Credit
Interest payable	162,000
Cash		162,000

Account	Debit	Credit
Asset under construction	60,000
Cash		60,000

Account	Debit	Credit
Dividends payable	220,000
Cash		220,000

Account	Debit	Credit
Current tax payable	240,000
Cash		240,000

Classification of interest, dividends, taxes and ambiguous cash flows (wording before IFRS 18)

Judgment

IAS 7 §31IAS 7 §33IAS 7 §34IAS 7 §35IAS 7 §36IAS 7 §6IAS 7 §14IAS 7 §16

The entity's method for classifying interest and dividends (wording before IFRS 18)
JudgmentRequired
Interest paid and dividends paid in financing
Interest paid in operating, dividends paid in financing / Interest paid and dividends paid in financing / Interest paid and dividends paid in operating / Interest paid in financing, dividends paid in operating
Professional judgement within the standard: for an entity other than a financial institution, the options in para. 33 and 34 (wording before IFRS 18) are choices of the entity; the method in the case is case data, applied consistently (para. 31).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Classification of taxes paid
JudgmentRequired
Partly specifically identified with investing or financing
Entirely in operating activities (general case) / Partly specifically identified with investing or financing
Rule: taxes in operating unless specifically identified with investing or financing; where taxes are split, the total of taxes paid is disclosed (para. 35 and 36, wording before IFRS 18).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Cash flows that are ambiguous under the definitions
JudgmentRequired
Classified under the standard's definitions and examples
Classified under the standard's definitions and examples / Classification driven by the entity's main activity / No ambiguous cash flow
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Interest paid classified as operating
Number
0
Interest paid classified as financing
Number
222,000
Dividends paid classified as operating
Number
0
Dividends paid classified as financing
Number
220,000
Dividends received classified as operating
Number
Dividends received classified as investing
Number
Taxes paid classified as operating
Number
200,000
Taxes paid identified with investing
Number
40,000
Taxes paid identified with financing
Number
0

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Conclusion

Statement finalised, cash reconciliation, classification methods and points submitted to the reviewer
ConclusionRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References

Checks and financial statement impact

Closing cash = opening cash + net change + exchange effectNot evaluated
Direct and indirect methods agree (receipts from customers = cash generated + payments)Not evaluated
Interest paid fully classifiedPass
Dividends paid fully classifiedPass
Taxes paid fully classifiedPass
Classification method documentedPass
Classification of taxes documentedPass

Assets: -622,000
Liabilities: -622,000
Profit or loss: 0
OCI: 0
Equity: 0

File and entity

File for preparing the consolidated statement of cash flows of a retail group

Case tasks documented here

Compute the changes in working capital excluding subsidiaries acquired and disposed of.
Compute the non-cash items.
Compute the interest paid.
Compute the tax paid.
Determine the net operating cash flow with the indirect method.
Compute the receipts from customers.
Compute the payments to suppliers and to employees.
Compute the purchases paid and the proceeds from disposals of equipment.
Determine the investing and financing cash flows and the net change.
Present the entries for the underlying transactions.

Inputs

Entity, period, presentation currency and method used for operating cash flows
TextRequired
HESTREL_GROUP_CONSOLIDATED_20X5_EUR
Cash and cash equivalents at the beginning of the period (statement amount)
Number
1,200,000
Cash and cash equivalents at the end of the period (cash analysis)
Number
850,000
Profit before tax for the period
NumberRequired
1,315,000
Teaching assumption: the case starts from profit before tax, which amounts to adding back the tax expense and deducting the tax paid; the indirect method starts from profit or loss (para. 18 and 20, wording before IFRS 18).
Depreciation of property, plant and equipment
Number
950,000
Other depreciation and amortisation (right-of-use assets, intangible assets)
Number
380,000
Impairment losses on property, plant and equipment
Number
Net charge to provisions (charges − reversals)
Number
60,000
Unrealised foreign exchange losses included in profit
Number
50,000
Unrealised foreign exchange gains included in profit
Number
25,000
Share of profit of associates (equity method)
Number
180,000
Interest expense recognised in profit or loss
Number
260,000
Teaching assumption: interest expense is added back in cash generated, then interest paid is presented under the entity's classification method.
Interest portion of the lease payments of the period
Number
70,000
Gain on disposal of property, plant and equipment
Number
40,000
Loss on disposal of property, plant and equipment
Number
Gain on disposal of subsidiaries included in profit
Number
150,000
Trade receivables at the beginning of the period
Number
2,600,000
Trade receivables at the end of the period
Number
3,050,000
Inventories at the beginning of the period
Number
3,100,000
Inventories at the end of the period
Number
3,600,000
Trade payables at the beginning of the period
Number
2,900,000
Trade payables at the end of the period
Number
3,380,000
Employee benefit payables at the beginning of the period
Number
Employee benefit payables at the end of the period
Number
Trade receivables of subsidiaries acquired (date control obtained)
Number
500,000
Trade receivables of subsidiaries disposed of (date control lost)
Number
220,000
Inventories of subsidiaries acquired (date control obtained)
Number
700,000
Inventories of subsidiaries disposed of (date control lost)
Number
250,000
Trade payables of subsidiaries acquired (date control obtained)
Number
450,000
Trade payables of subsidiaries disposed of (date control lost)
Number
200,000
Revenue
NumberRequired
24,000,000
Receivables written off in the period
Number
Cost of sales excluding depreciation
NumberRequired
15,600,000
Employee benefits expense
NumberRequired
4,100,000
Other operating expenses paid
Number
1,680,000
Dividends received in the period (amount determined in the group file)
Number
120,000
Property, plant and equipment at the beginning of the period (carrying amount)
NumberRequired
8,400,000
Property, plant and equipment at the end of the period (carrying amount)
NumberRequired
9,890,000
Cost of the assets disposed of
Number
600,000
Accumulated depreciation of the assets disposed of
Number
440,000
Carrying amount of the assets disposed of
Number
160,000
Property, plant and equipment derecognised with subsidiaries disposed of
Number
700,000
Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets)
Number
1,500,000
Rule: an acquisition financed by a lease, by assuming a liability or as part of obtaining control is not an investing payment (para. 43 and 44); assets of subsidiaries acquired belong to the acquisition of subsidiaries line (group cash flows workpaper).
Increase in carrying amount from a revaluation
Number
Disposal proceeds still receivable at the end of the period
Number
Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper)
Number
2,150,000
Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper)
Number
1,120,000
Other investing receipts
Number
Other investing payments (investments that are not cash equivalents)
Number
300,000
Borrowings at the beginning of the period
NumberRequired
4,000,000
Borrowings at the end of the period
NumberRequired
6,450,000
New borrowings received in cash
Number
3,000,000
Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest)
Number
650,000
Non-cash decreases in borrowings (conversion into equity, exchange differences)
Number
Increase in share capital and premium in the period
Number
600,000
Non-cash share issues (conversion, consideration for an acquisition)
Number
600,000
Share issue costs paid separately
Number
Lease payments of the period (total)
Number
520,000
Principal portion of the lease payments (financing liabilities reconciliation)
Number
450,000
Other financing receipts
Number
Other financing payments (purchases of non-controlling interests…)
Number
300,000
Interest payable at the beginning of the period
Number
40,000
Interest payable at the end of the period
Number
55,000
Interest capitalised in the cost of an asset
Number
Non-cash interest (unwinding of discount, interest added to the debt)
Number
Dividends payable at the beginning of the period
Number
Dividends declared in the period
Number
500,000
Dividends payable at the end of the period
Number
Dividends settled in shares
Number
Current tax payable at the beginning of the period
Number
180,000
Current tax expense for the period
Number
520,000
Current tax payable of subsidiaries acquired
Number
30,000
Current tax payable at the end of the period
Number
230,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Classification of cash flows and non-cash transactions

Analysis

IAS 7 §10IAS 7 §11IAS 7 §14IAS 7 §16IAS 7 §17IAS 7 §43IAS 7 §44

Points reviewed
ChecklistRequired
- Cash flows classified by operating, investing and financing activities
- Disposal proceeds in investing, gain removed from operating cash flow
- Only expenditures that result in a recognised asset are classified as investing
- Share issues, borrowings, repayments and principal portion of lease payments in financing
- Non-cash transactions excluded from the statement and disclosed elsewhere

Operating cash flows: indirect method (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §20IAS 7 §14

Change in trade receivables (cash effect)
Calculation
-170,000
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; − Trade receivables at the end of the period
Calculation method (consequence of paras. 39, 41 and 42: obtaining or losing control is a single investing line, net of the cash acquired or disposed of, with the assets and liabilities involved detailed in the notes, para. 40): balances of subsidiaries acquired or disposed of are neutralised in the changes, their effect belonging to the acquisition and disposal of subsidiaries lines (group cash flows workpaper).
Change in inventories (cash effect)
Calculation
-50,000
Inventories at the beginning of the period ; Inventories of subsidiaries acquired (date control obtained) ; − Inventories of subsidiaries disposed of (date control lost) ; − Inventories at the end of the period
Change in trade payables (cash effect)
Calculation
230,000
Trade payables at the end of the period ; − Trade payables at the beginning of the period ; − Trade payables of subsidiaries acquired (date control obtained) ; Trade payables of subsidiaries disposed of (date control lost)
Change in employee benefit payables (cash effect)
Calculation
0
Employee benefit payables at the end of the period ; − Employee benefit payables at the beginning of the period
Non-cash items (total)
Calculation
1,235,000
Depreciation of property, plant and equipment ; Other depreciation and amortisation (right-of-use assets, intangible assets) ; Impairment losses on property, plant and equipment ; Net charge to provisions (charges − reversals) ; Unrealised foreign exchange losses included in profit ; − Unrealised foreign exchange gains included in profit ; − Share of profit of associates (equity method)
Cash generated from operations (before interest and taxes paid)
CalculationRequired
2,630,000
Profit before tax for the period ; Non-cash items (total) ; Interest expense recognised in profit or loss ; − Gain on disposal of property, plant and equipment ; Loss on disposal of property, plant and equipment ; − Gain on disposal of subsidiaries included in profit ; Change in trade receivables (cash effect) ; Change in inventories (cash effect) ; Change in trade payables (cash effect) ; Change in employee benefit payables (cash effect)

Operating cash flows: direct method (cross-check) (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §19

Cash received from customers
Calculation
23,830,000
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; Revenue ; − Trade receivables at the end of the period ; − Receivables written off in the period
Cash paid to suppliers
Calculation
15,420,000
Cost of sales excluding depreciation ; Inventories at the end of the period ; − Inventories at the beginning of the period ; − Inventories of subsidiaries acquired (date control obtained) ; Inventories of subsidiaries disposed of (date control lost) ; Trade payables at the beginning of the period ; Trade payables of subsidiaries acquired (date control obtained) ; − Trade payables of subsidiaries disposed of (date control lost) ; − Trade payables at the end of the period
Cash paid to employees
Calculation
4,100,000
Employee benefits expense ; Employee benefit payables at the beginning of the period ; − Employee benefit payables at the end of the period

Investing cash flows

Calculations

IAS 7 §16IAS 7 §43

Proceeds from disposal of property, plant and equipment
Calculation
200,000
Carrying amount of the assets disposed of ; Gain on disposal of property, plant and equipment ; − Loss on disposal of property, plant and equipment ; − Disposal proceeds still receivable at the end of the period
Purchases of property, plant and equipment paid
CalculationRequired
1,800,000
Property, plant and equipment at the end of the period (carrying amount) ; − Property, plant and equipment at the beginning of the period (carrying amount) ; Depreciation of property, plant and equipment ; Impairment losses on property, plant and equipment ; Carrying amount of the assets disposed of ; Property, plant and equipment derecognised with subsidiaries disposed of ; − Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets) ; − Increase in carrying amount from a revaluation

Interest, dividends and taxes paid (wording before IFRS 18)

Calculations

IAS 7 §31IAS 7 §32IAS 7 §35

Total interest paid (including interest capitalised)
Calculation
245,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; Interest capitalised in the cost of an asset ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt)
Interest paid through interest payable (excluding lease and capitalised interest)
Calculation
175,000
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt) ; − Interest portion of the lease payments of the period
Dividends paid
Calculation
500,000
Dividends payable at the beginning of the period ; Dividends declared in the period ; − Dividends payable at the end of the period ; − Dividends settled in shares
Income taxes paid
Calculation
500,000
Current tax payable at the beginning of the period ; Current tax expense for the period ; Current tax payable of subsidiaries acquired ; − Current tax payable at the end of the period

Statement of cash flows and reconciliation of cash

Calculations

IAS 7 §10IAS 7 §17IAS 7 §18IAS 7 §28

Net cash from operating activities
CalculationRequired
1,885,000
Cash generated from operations (before interest and taxes paid) ; − Interest paid classified as operating ; − Dividends paid classified as operating ; Dividends received classified as operating ; − Taxes paid classified as operating
Net cash from investing activities
CalculationRequired
-2,810,000
Proceeds from disposal of property, plant and equipment ; − Purchases of property, plant and equipment paid ; − Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper) ; Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper) ; Dividends received classified as investing ; Other investing receipts ; − Other investing payments (investments that are not cash equivalents) ; − Taxes paid identified with investing
Repayments of borrowings
CalculationRequired
1,200,000
Borrowings at the beginning of the period ; New borrowings received in cash ; Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest) ; − Non-cash decreases in borrowings (conversion into equity, exchange differences) ; − Borrowings at the end of the period
Proceeds from issuing shares
Calculation
0
Increase in share capital and premium in the period ; − Non-cash share issues (conversion, consideration for an acquisition) ; − Share issue costs paid separately
Net cash from financing activities
CalculationRequired
550,000
Proceeds from issuing shares ; New borrowings received in cash ; − Repayments of borrowings ; − Principal portion of the lease payments (financing liabilities reconciliation) ; Other financing receipts ; − Other financing payments (purchases of non-controlling interests…) ; − Interest paid classified as financing ; − Dividends paid classified as financing ; − Taxes paid identified with financing
Net increase (decrease) in cash and cash equivalents
Calculation
-375,000
Net cash from operating activities ; Net cash from investing activities ; Net cash from financing activities
Effect of exchange rate changes on cash (cash analysis; negative for a loss)
Number
25,000
Amount taken from the cash analysis: the exchange effect is presented separately from the three activities to reconcile opening and closing cash (para. 28).

Entries of the underlying transactions (link to the cash flows)

Entries

Disposal of an asset at a gain
Entry
Account Debit Credit
Cash 200,000
Accumulated depreciation 440,000
Property, plant and equipment (cost) 600,000
Gain on disposal 40,000
Purchase of assets paid in cash
Entry
Account Debit Credit
Property, plant and equipment (cost) 1,800,000
Cash 1,800,000
Payment of accrued interest
Entry
Account Debit Credit
Interest payable 175,000
Cash 175,000
Interest paid capitalised in an asset under construction
Entry
Debit Asset under construction ← Interest capitalised in the cost of an asset ; Credit Cash ← Interest capitalised in the cost of an asset
Lessee's lease payment
Entry
Account Debit Credit
Lease liability 450,000
Interest expense 70,000
Cash 520,000
Payment of dividends
Entry
Account Debit Credit
Dividends payable 500,000
Cash 500,000
Payment of current tax
Entry
Account Debit Credit
Current tax payable 500,000
Cash 500,000
Drawdown of a loan
Entry
Account Debit Credit
Cash 3,000,000
Borrowings 3,000,000
Issue of shares for cash
Entry
Debit Cash ← Proceeds from issuing shares ; Credit Share capital and premium ← Proceeds from issuing shares

Account	Debit	Credit
Cash	200,000
Accumulated depreciation	440,000
Property, plant and equipment (cost)		600,000
Gain on disposal		40,000

Account	Debit	Credit
Property, plant and equipment (cost)	1,800,000
Cash		1,800,000

Account	Debit	Credit
Interest payable	175,000
Cash		175,000

Account	Debit	Credit
Lease liability	450,000
Interest expense	70,000
Cash		520,000

Account	Debit	Credit
Dividends payable	500,000
Cash		500,000

Account	Debit	Credit
Current tax payable	500,000
Cash		500,000

Account	Debit	Credit
Cash	3,000,000
Borrowings		3,000,000

Classification of interest, dividends, taxes and ambiguous cash flows (wording before IFRS 18)

Judgment

IAS 7 §31IAS 7 §33IAS 7 §34IAS 7 §35IAS 7 §36IAS 7 §6IAS 7 §14IAS 7 §16

The entity's method for classifying interest and dividends (wording before IFRS 18)
JudgmentRequired
Interest paid in operating, dividends paid in financing
Interest paid in operating, dividends paid in financing / Interest paid and dividends paid in financing / Interest paid and dividends paid in operating / Interest paid in financing, dividends paid in operating
Professional judgement within the standard: for an entity other than a financial institution, the options in para. 33 and 34 (wording before IFRS 18) are choices of the entity; the method in the case is case data, applied consistently (para. 31).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Classification of taxes paid
JudgmentRequired
Entirely in operating activities (general case)
Entirely in operating activities (general case) / Partly specifically identified with investing or financing
Rule: taxes in operating unless specifically identified with investing or financing; where taxes are split, the total of taxes paid is disclosed (para. 35 and 36, wording before IFRS 18).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Cash flows that are ambiguous under the definitions
JudgmentRequired
Classified under the standard's definitions and examples
Classified under the standard's definitions and examples / Classification driven by the entity's main activity / No ambiguous cash flow
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Interest paid classified as operating
Number
245,000
Interest paid classified as financing
Number
0
Dividends paid classified as operating
Number
0
Dividends paid classified as financing
Number
500,000
Dividends received classified as operating
Number
0
Dividends received classified as investing
Number
120,000
Taxes paid classified as operating
Number
500,000
Taxes paid identified with investing
Number
0
Taxes paid identified with financing
Number
0

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Conclusion

Statement finalised, cash reconciliation, classification methods and points submitted to the reviewer
ConclusionRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References

Checks and financial statement impact

Closing cash = opening cash + net change + exchange effectPass
Direct and indirect methods agree (receipts from customers = cash generated + payments)Pass
Interest paid fully classifiedPass
Dividends paid fully classifiedPass
Taxes paid fully classifiedPass
Classification method documentedPass
Classification of taxes documentedPass

Assets: 1,345,000
Liabilities: 1,375,000
Profit or loss: -30,000
OCI: 0
Equity: -30,000

Inputs

Entity, period, presentation currency and method used for operating cash flows
TextRequired
Cash and cash equivalents at the beginning of the period (statement amount)
Number
Cash and cash equivalents at the end of the period (cash analysis)
Number
Profit before tax for the period
NumberRequired
Teaching assumption: the case starts from profit before tax, which amounts to adding back the tax expense and deducting the tax paid; the indirect method starts from profit or loss (para. 18 and 20, wording before IFRS 18).
Depreciation of property, plant and equipment
Number
Other depreciation and amortisation (right-of-use assets, intangible assets)
Number
Impairment losses on property, plant and equipment
Number
Net charge to provisions (charges − reversals)
Number
Unrealised foreign exchange losses included in profit
Number
Unrealised foreign exchange gains included in profit
Number
Share of profit of associates (equity method)
Number
Interest expense recognised in profit or loss
Number
Teaching assumption: interest expense is added back in cash generated, then interest paid is presented under the entity's classification method.
Interest portion of the lease payments of the period
Number
Gain on disposal of property, plant and equipment
Number
Loss on disposal of property, plant and equipment
Number
Gain on disposal of subsidiaries included in profit
Number
Trade receivables at the beginning of the period
Number
Trade receivables at the end of the period
Number
Inventories at the beginning of the period
Number
Inventories at the end of the period
Number
Trade payables at the beginning of the period
Number
Trade payables at the end of the period
Number
Employee benefit payables at the beginning of the period
Number
Employee benefit payables at the end of the period
Number
Trade receivables of subsidiaries acquired (date control obtained)
Number
Trade receivables of subsidiaries disposed of (date control lost)
Number
Inventories of subsidiaries acquired (date control obtained)
Number
Inventories of subsidiaries disposed of (date control lost)
Number
Trade payables of subsidiaries acquired (date control obtained)
Number
Trade payables of subsidiaries disposed of (date control lost)
Number
Revenue
NumberRequired
Receivables written off in the period
Number
Cost of sales excluding depreciation
NumberRequired
Employee benefits expense
NumberRequired
Other operating expenses paid
Number
Dividends received in the period (amount determined in the group file)
Number
Property, plant and equipment at the beginning of the period (carrying amount)
NumberRequired
Property, plant and equipment at the end of the period (carrying amount)
NumberRequired
Cost of the assets disposed of
Number
Accumulated depreciation of the assets disposed of
Number
Carrying amount of the assets disposed of
Number
Property, plant and equipment derecognised with subsidiaries disposed of
Number
Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets)
Number
Rule: an acquisition financed by a lease, by assuming a liability or as part of obtaining control is not an investing payment (para. 43 and 44); assets of subsidiaries acquired belong to the acquisition of subsidiaries line (group cash flows workpaper).
Increase in carrying amount from a revaluation
Number
Disposal proceeds still receivable at the end of the period
Number
Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper)
Number
Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper)
Number
Other investing receipts
Number
Other investing payments (investments that are not cash equivalents)
Number
Borrowings at the beginning of the period
NumberRequired
Borrowings at the end of the period
NumberRequired
New borrowings received in cash
Number
Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest)
Number
Non-cash decreases in borrowings (conversion into equity, exchange differences)
Number
Increase in share capital and premium in the period
Number
Non-cash share issues (conversion, consideration for an acquisition)
Number
Share issue costs paid separately
Number
Lease payments of the period (total)
Number
Principal portion of the lease payments (financing liabilities reconciliation)
Number
Other financing receipts
Number
Other financing payments (purchases of non-controlling interests…)
Number
Interest payable at the beginning of the period
Number
Interest payable at the end of the period
Number
Interest capitalised in the cost of an asset
Number
Non-cash interest (unwinding of discount, interest added to the debt)
Number
Dividends payable at the beginning of the period
Number
Dividends declared in the period
Number
Dividends payable at the end of the period
Number
Dividends settled in shares
Number
Current tax payable at the beginning of the period
Number
Current tax expense for the period
Number
Current tax payable of subsidiaries acquired
Number
Current tax payable at the end of the period
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Classification of cash flows and non-cash transactions

Analysis

IAS 7 §10IAS 7 §11IAS 7 §14IAS 7 §16IAS 7 §17IAS 7 §43IAS 7 §44

Points reviewed
ChecklistRequired
- Cash flows classified by operating, investing and financing activities
- Disposal proceeds in investing, gain removed from operating cash flow
- Only expenditures that result in a recognised asset are classified as investing
- Share issues, borrowings, repayments and principal portion of lease payments in financing
- Non-cash transactions excluded from the statement and disclosed elsewhere

Operating cash flows: indirect method (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §20IAS 7 §14

Change in trade receivables (cash effect)
Calculation
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; − Trade receivables at the end of the period
Calculation method (consequence of paras. 39, 41 and 42: obtaining or losing control is a single investing line, net of the cash acquired or disposed of, with the assets and liabilities involved detailed in the notes, para. 40): balances of subsidiaries acquired or disposed of are neutralised in the changes, their effect belonging to the acquisition and disposal of subsidiaries lines (group cash flows workpaper).
Change in inventories (cash effect)
Calculation
Inventories at the beginning of the period ; Inventories of subsidiaries acquired (date control obtained) ; − Inventories of subsidiaries disposed of (date control lost) ; − Inventories at the end of the period
Change in trade payables (cash effect)
Calculation
Trade payables at the end of the period ; − Trade payables at the beginning of the period ; − Trade payables of subsidiaries acquired (date control obtained) ; Trade payables of subsidiaries disposed of (date control lost)
Change in employee benefit payables (cash effect)
Calculation
Employee benefit payables at the end of the period ; − Employee benefit payables at the beginning of the period
Non-cash items (total)
Calculation
Depreciation of property, plant and equipment ; Other depreciation and amortisation (right-of-use assets, intangible assets) ; Impairment losses on property, plant and equipment ; Net charge to provisions (charges − reversals) ; Unrealised foreign exchange losses included in profit ; − Unrealised foreign exchange gains included in profit ; − Share of profit of associates (equity method)
Cash generated from operations (before interest and taxes paid)
CalculationRequired
Profit before tax for the period ; Non-cash items (total) ; Interest expense recognised in profit or loss ; − Gain on disposal of property, plant and equipment ; Loss on disposal of property, plant and equipment ; − Gain on disposal of subsidiaries included in profit ; Change in trade receivables (cash effect) ; Change in inventories (cash effect) ; Change in trade payables (cash effect) ; Change in employee benefit payables (cash effect)

Operating cash flows: direct method (cross-check) (wording before IFRS 18)

Calculations

IAS 7 §18IAS 7 §19

Cash received from customers
Calculation
Trade receivables at the beginning of the period ; Trade receivables of subsidiaries acquired (date control obtained) ; − Trade receivables of subsidiaries disposed of (date control lost) ; Revenue ; − Trade receivables at the end of the period ; − Receivables written off in the period
Cash paid to suppliers
Calculation
Cost of sales excluding depreciation ; Inventories at the end of the period ; − Inventories at the beginning of the period ; − Inventories of subsidiaries acquired (date control obtained) ; Inventories of subsidiaries disposed of (date control lost) ; Trade payables at the beginning of the period ; Trade payables of subsidiaries acquired (date control obtained) ; − Trade payables of subsidiaries disposed of (date control lost) ; − Trade payables at the end of the period
Cash paid to employees
Calculation
Employee benefits expense ; Employee benefit payables at the beginning of the period ; − Employee benefit payables at the end of the period

Investing cash flows

Calculations

IAS 7 §16IAS 7 §43

Proceeds from disposal of property, plant and equipment
Calculation
Carrying amount of the assets disposed of ; Gain on disposal of property, plant and equipment ; − Loss on disposal of property, plant and equipment ; − Disposal proceeds still receivable at the end of the period
Purchases of property, plant and equipment paid
CalculationRequired
Property, plant and equipment at the end of the period (carrying amount) ; − Property, plant and equipment at the beginning of the period (carrying amount) ; Depreciation of property, plant and equipment ; Impairment losses on property, plant and equipment ; Carrying amount of the assets disposed of ; Property, plant and equipment derecognised with subsidiaries disposed of ; − Additions not paid in cash (subsidiaries acquired, amounts payable to suppliers of assets) ; − Increase in carrying amount from a revaluation

Interest, dividends and taxes paid (wording before IFRS 18)

Calculations

IAS 7 §31IAS 7 §32IAS 7 §35

Total interest paid (including interest capitalised)
Calculation
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; Interest capitalised in the cost of an asset ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt)
Interest paid through interest payable (excluding lease and capitalised interest)
Calculation
Interest payable at the beginning of the period ; Interest expense recognised in profit or loss ; − Interest payable at the end of the period ; − Non-cash interest (unwinding of discount, interest added to the debt) ; − Interest portion of the lease payments of the period
Dividends paid
Calculation
Dividends payable at the beginning of the period ; Dividends declared in the period ; − Dividends payable at the end of the period ; − Dividends settled in shares
Income taxes paid
Calculation
Current tax payable at the beginning of the period ; Current tax expense for the period ; Current tax payable of subsidiaries acquired ; − Current tax payable at the end of the period

Statement of cash flows and reconciliation of cash

Calculations

IAS 7 §10IAS 7 §17IAS 7 §18IAS 7 §28

Net cash from operating activities
CalculationRequired
Cash generated from operations (before interest and taxes paid) ; − Interest paid classified as operating ; − Dividends paid classified as operating ; Dividends received classified as operating ; − Taxes paid classified as operating
Net cash from investing activities
CalculationRequired
Proceeds from disposal of property, plant and equipment ; − Purchases of property, plant and equipment paid ; − Acquisition of subsidiaries, net of cash acquired (group cash flows workpaper) ; Disposal of subsidiaries, net of cash disposed of (group cash flows workpaper) ; Dividends received classified as investing ; Other investing receipts ; − Other investing payments (investments that are not cash equivalents) ; − Taxes paid identified with investing
Repayments of borrowings
CalculationRequired
Borrowings at the beginning of the period ; New borrowings received in cash ; Non-cash increases in borrowings (subsidiaries acquired, exchange differences, capitalised interest) ; − Non-cash decreases in borrowings (conversion into equity, exchange differences) ; − Borrowings at the end of the period
Proceeds from issuing shares
Calculation
Increase in share capital and premium in the period ; − Non-cash share issues (conversion, consideration for an acquisition) ; − Share issue costs paid separately
Net cash from financing activities
CalculationRequired
Proceeds from issuing shares ; New borrowings received in cash ; − Repayments of borrowings ; − Principal portion of the lease payments (financing liabilities reconciliation) ; Other financing receipts ; − Other financing payments (purchases of non-controlling interests…) ; − Interest paid classified as financing ; − Dividends paid classified as financing ; − Taxes paid identified with financing
Net increase (decrease) in cash and cash equivalents
Calculation
Net cash from operating activities ; Net cash from investing activities ; Net cash from financing activities
Effect of exchange rate changes on cash (cash analysis; negative for a loss)
Number
Amount taken from the cash analysis: the exchange effect is presented separately from the three activities to reconcile opening and closing cash (para. 28).

Entries of the underlying transactions (link to the cash flows)

Entries

Disposal of an asset at a gain
Entry
Debit Cash ← Proceeds from disposal of property, plant and equipment ; Debit Accumulated depreciation ← Accumulated depreciation of the assets disposed of ; Credit Property, plant and equipment (cost) ← Cost of the assets disposed of ; Credit Gain on disposal ← Gain on disposal of property, plant and equipment
Purchase of assets paid in cash
Entry
Debit Property, plant and equipment (cost) ← Purchases of property, plant and equipment paid ; Credit Cash ← Purchases of property, plant and equipment paid
Payment of accrued interest
Entry
Debit Interest payable ← Interest paid through interest payable (excluding lease and capitalised interest) ; Credit Cash ← Interest paid through interest payable (excluding lease and capitalised interest)
Interest paid capitalised in an asset under construction
Entry
Debit Asset under construction ← Interest capitalised in the cost of an asset ; Credit Cash ← Interest capitalised in the cost of an asset
Lessee's lease payment
Entry
Debit Lease liability ← Principal portion of the lease payments (financing liabilities reconciliation) ; Debit Interest expense ← Interest portion of the lease payments of the period ; Credit Cash ← Lease payments of the period (total)
Payment of dividends
Entry
Debit Dividends payable ← Dividends paid ; Credit Cash ← Dividends paid
Payment of current tax
Entry
Debit Current tax payable ← Income taxes paid ; Credit Cash ← Income taxes paid
Drawdown of a loan
Entry
Debit Cash ← New borrowings received in cash ; Credit Borrowings ← New borrowings received in cash
Issue of shares for cash
Entry
Debit Cash ← Proceeds from issuing shares ; Credit Share capital and premium ← Proceeds from issuing shares

Classification of interest, dividends, taxes and ambiguous cash flows (wording before IFRS 18)

Judgment

IAS 7 §31IAS 7 §33IAS 7 §34IAS 7 §35IAS 7 §36IAS 7 §6IAS 7 §14IAS 7 §16

The entity's method for classifying interest and dividends (wording before IFRS 18)
JudgmentRequired
Interest paid in operating, dividends paid in financing / Interest paid and dividends paid in financing / Interest paid and dividends paid in operating / Interest paid in financing, dividends paid in operating
Professional judgement within the standard: for an entity other than a financial institution, the options in para. 33 and 34 (wording before IFRS 18) are choices of the entity; the method in the case is case data, applied consistently (para. 31).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Classification of taxes paid
JudgmentRequired
Entirely in operating activities (general case) / Partly specifically identified with investing or financing
Rule: taxes in operating unless specifically identified with investing or financing; where taxes are split, the total of taxes paid is disclosed (para. 35 and 36, wording before IFRS 18).
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Cash flows that are ambiguous under the definitions
JudgmentRequired
Classified under the standard's definitions and examples / Classification driven by the entity's main activity / No ambiguous cash flow
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Interest paid classified as operating
Number
Interest paid classified as financing
Number
Dividends paid classified as operating
Number
Dividends paid classified as financing
Number
Dividends received classified as operating
Number
Dividends received classified as investing
Number
Taxes paid classified as operating
Number
Taxes paid identified with investing
Number
Taxes paid identified with financing
Number

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Conclusion

Statement finalised, cash reconciliation, classification methods and points submitted to the reviewer
ConclusionRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References