FRS 1 (Financial Reporting Standard 1) requires companies to prepare a Cash Flow Statement as part of their financial reporting. This statement provides a detailed breakdown of the cash inflows and outflows during a specific accounting period, categorized into Operating, Investing, and Financing Activities. The objective of FRS 1 is to offer transparency regarding how companies manage their cash resources, ensuring consistency and comparability across financial statements.
1. Cash Flow Statement for XYZ Ltd (Prepared According to FRS 1)
XYZ Ltd
Cash Flow Statement for the Year Ended 31 December 2023
Description
Amount ($)
Cash Flows from Operating Activities:
Net Profit Before Tax
100,000
Adjustments for Non-Cash Items:
Depreciation
20,000
Amortization of Intangible Assets
5,000
Interest Expense
8,000
Loss on Disposal of Fixed Assets
3,000
Operating Profit Before Working Capital Changes
136,000
Increase in Trade Receivables
(10,000)
Decrease in Inventories
7,000
Increase in Trade Payables
12,000
Cash Generated from Operations
145,000
Income Taxes Paid
(20,000)
Net Cash from Operating Activities
125,000
Cash Flows from Investing Activities:
Purchase of Property, Plant, and Equipment
(50,000)
Proceeds from Sale of Fixed Assets
10,000
Purchase of Investments
(15,000)
Interest Received
4,000
Net Cash Used in Investing Activities
(51,000)
Cash Flows from Financing Activities:
Proceeds from Issue of Share Capital
40,000
Proceeds from Long-Term Borrowings
30,000
Repayment of Borrowings
(25,000)
Dividends Paid
(15,000)
Interest Paid
(8,000)
Net Cash from Financing Activities
22,000
Net Increase in Cash and Cash Equivalents
96,000
Cash and Cash Equivalents at Beginning of Period
50,000
Cash and Cash Equivalents at End of Period
146,000
2.…
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