Page 311 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

The statement of cash flows

Cash flows from financing activities

This section of the statement of cash flows includes the proceeds from issuing
shares, along with receipt or repayment of loans during the year.

A computer-based assessment question will often not tell you that there have been
changes in share capital and/or loans. You have to work this out by looking to see if
the ordinary or preference share capital has increased, together with the movement
on share premium.

Similarly, you will have to look at any loans balances. If they have increased, there
has been a cash inflow. If they have decreased, there has been a cash outflow.

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