Page 94 - Ebook Financial Accounting 3

b) Cash flows from investing activities

Investing activities include:

i. acquisition of fixed assets for use and their disposal.

ii. acquisition of long-term investments in securities and their disposals; and
iii. granting loans to other entities and their recoveries

Non-current Assets Account

RM RM

Bal b/d (from opening SOFP) xx Disposal – (Cost price) xx

Bank – (Purchase) xx Revaluation of asset xx

Revaluation of asset xx Bal c/d (from closing SOFP) xx

XX XX

c) Cash flow from financing activities

Financing activities include those transactions which affect the entity’s capital and
long-term liabilities such as:

i. issue of share (cash inflow)
ii. issue of debentures (cash inflow)

iii. taking long-term loans from banks (cash inflow)

iv. redemption of shares (cash outflow)
v. redemption of debentures (cash outflow)

vi. repayment of bank loans (cash outflow); and
vii. expenses for issues of shares and debentures (cash outflow)

• The following activities will not result in cash flows:
# Issue of bonus shares (shares issued free)

# Issue of debentures at discount (cash inflows = nominal value of debenture issued
less discount)

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