Page 309 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

The statement of cash flows

3.6 Cash flows from operating activities

We now need to calculate the net cash flow from operating activities by deducting the
following items from cash generated by operations:

 interest paid

 taxation paid.

Note that in both cases, it is the cash paid during the accounting year that is
included.

3.7 Calculations of interest/taxation paid

The cash flow should be calculated with reference to:

 the statement of profit or loss charge for the item and

 any opening or closing payable shown on the statement of financial position.

A ledger accounting working may be helpful.

303