Page 81 - IC26 LIFE INSURANCE FINANCE

5] Dividend and Interest paid

An enterprise should report separately major classes of gross cash receipts and gross cash payments arising

from investing and financing activities.

However, cash flows from following activities may be reported on a net basis. Cash receipts and payments

on behalf of customers

For example: Cash collected on behalf of, and paid over to, the owners of properties.

Cash flows from items in which turnover is quick, the amounts are large and the maturities are short.

For example: Purchase and sale of investments

For Financial Enterprise: Cash receipts and payments for the acceptance and repayment of deposits with a

fixed maturity date.

For Financial Enterprise: Deposits placed/withdrawn from other financial enterprises

For Financial Enterprise: Cash advances and loans made to customers and the repayment of those advances

and loans.

Foreign Currency Cash Flows:

Cash flows arising in foreign currency should be recorded in enterprise’ reporting currency applying the

exchange conversion rate existing on the date of cash flow.

The effect of changes in exchange rates of cash and cash equivalents held in foreign currency should be

reported as separate part of the reconciliation of the changes in cash and cash equivalents during the

period.

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