Hello Sir, Under "Cash from Financing Activities", why did we not subtract Dividends? From what I understand under "Cash from Financing Activities", we have Long-Term Borrowing and its repayment as well as Issues of Shares and its dividends paid. Thankyou for the amazing lectures btw !!!
IAS 7 allows dividends paid to be shown under either cash flows from operating activities, or under cash flows from financing activities (as long as it is shown under the same heading every year). In the exam you can show it under either heading.
Best explanation ever. Just to get a doubt off my head. I learned that tax payable in the beginning of year is the provision that must be paid later somewhere in the year and the entries are adjusted based on over provision or underprovision. I am trying to calculate cash paid under that method but i am not able to. Can you please elaborate on this further
@@opentuition thanks for the prompt response. I was actually talking about the profit from sale of non-current assets. Why do we have to deduct it when we actually got cash from our sales of the NCA?
@@somutochukwunwanya4415 The cash flow is what we sold it for. The profit is the difference between the sale proceeds and the net book value, which is not a cash flow.
@@opentuition could it also be that we don't want the profit from sales of NCA to appear twice (under operating activities and investment activities) which is why we remove it from operating activities?
@@somutochukwunwanya4415 We don''t want to show the profit from sales of NCA's anywhere because it is not a cash flow. That is why we remove it from the profit in the SOPL, and that is why we do not show it under investing activities (we show the cash received from the sale there). If you have more questions then please do ask them in the free Ask the Tutor Forum on our website. Our tutors do not regularly monitor questions posted here, but always answer questions asked in our Ask the Tutor forums.
thank you so much for this clear explanation, I finally understand it now, indeed best lecturer ever 🙂
The best lecturer ever ❤️
Thanks for making a difficult topic understandable
this is the best explanation🤩
thanks for the explanations!
Thanks
Hello Sir, Under "Cash from Financing Activities", why did we not subtract Dividends? From what I understand under "Cash from Financing Activities", we have Long-Term Borrowing and its repayment as well as Issues of Shares and its dividends paid. Thankyou for the amazing lectures btw !!!
IAS 7 allows dividends paid to be shown under either cash flows from operating activities, or under cash flows from financing activities (as long as it is shown under the same heading every year). In the exam you can show it under either heading.
thank you sir
How will I get this question?
By downloading our free lecture notes from our website (as stated at the start of the lecture).
Page 30? Where can i find this?
opentuition.com/acca/fa/acca-financial-accounting-fa-notes/
Best explanation ever. Just to get a doubt off my head. I learned that tax payable in the beginning of year is the provision that must be paid later somewhere in the year and the entries are adjusted based on over provision or underprovision. I am trying to calculate cash paid under that method but i am not able to. Can you please elaborate on this further
Never mind I found out how
Why isn't the profit or loss itself a cashflow?
Profit is after (for example) charging depreciation, and the depreciation each year is not an outflow of cash.
@@opentuition thanks for the prompt response. I was actually talking about the profit from sale of non-current assets. Why do we have to deduct it when we actually got cash from our sales of the NCA?
@@somutochukwunwanya4415 The cash flow is what we sold it for. The profit is the difference between the sale proceeds and the net book value, which is not a cash flow.
@@opentuition could it also be that we don't want the profit from sales of NCA to appear twice (under operating activities and investment activities) which is why we remove it from operating activities?
@@somutochukwunwanya4415 We don''t want to show the profit from sales of NCA's anywhere because it is not a cash flow. That is why we remove it from the profit in the SOPL, and that is why we do not show it under investing activities (we show the cash received from the sale there). If you have more questions then please do ask them in the free Ask the Tutor Forum on our website. Our tutors do not regularly monitor questions posted here, but always answer questions asked in our Ask the Tutor forums.