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Statement of cash flows

3.2 Cash flows from investing activities

Cash inflows may include:

 interest received

 dividends received

 proceeds from sale of non-current assets

Cash outflows may include:

 cash paid for purchase of property, plant and equipment

For interest and dividends received the cash flow should be calculated by
reference to the charge to profits for the item (shown in the statement of profit or
loss) and any opening or closing receivable balance (shown on the statement of
financial position). A T account approach or a list approach can be used to help with
calculations.

For property plant and equipment accounts the following T accounts will be
required.

 cost account

 accumulated depreciation account

 disposals account

Tutor notes guidance – discussion points

Take students through TYU 4 & 5 from chapter 19 of the Study Text

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