Be it what it may – a building, machinery or other equipment – there are times when they are revalued just after the acquisition. Either valued higher or lower of the cost, the approach for the statement of cash flows stays still the same. <\/p>\n
Effectively, as we have said, the statement of cash flows shows only movement of cash and nothing else. So if the cash didn’t move, the value is not shown. Now when we talk about revalued assets and their acquisitions on the statement – they are obviously never shown in the revalued value, but in the original cost actually paid. If the revaluation is also shown on the income statement, the non-cash adjustment (in the case it’s part of the operating profit) is done under operating activities’ cash flows and is shown as other adjustment. It’s never cash paid for property, plant and equipment under investing activities, as it wasn’t an actual cash movement.
\n
\nSo remember when preparing the statement of cash flows to actually include the full amount paid as the acquisition outflow. This is the real cash movement and as such should be on the line “Paid for property, plant and equipment” (or however you call the statement of cash flows line). The number one question for preparing the statement is and always will be “Did the cash actually move?” If yes, it’s on the statement, if no, it’s not. <\/p>\n","protected":false},"excerpt":{"rendered":"
Be it what it may – a building, machinery or other equipment – there are times when they are revalued just after the acquisition. Either valued higher or lower of the cost, the approach for the statement of cash flows stays still the same. Effectively, as we have said, the statement of cash flows shows […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,50],"tags":[],"class_list":["post-2779","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-5-statement-of-cash-flows"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/2779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=2779"}],"version-history":[{"count":1,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/2779\/revisions"}],"predecessor-version":[{"id":2781,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/2779\/revisions\/2781"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=2779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=2779"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=2779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}