Definition: Activities that result in changes in the size and composition of the contributed capital and borrowings of the entity.
Cash receipts and cash payments relating to equity and debt related instruments:
- cash receipts of payments from owners on shares issued and additional paid-in capital,
- cash payments to owners in respect of repayments on shares redeemed, re-payment of additional paid-in capital and dividend paid,
- cash receipts from third party financiers in respect of new debt loans received,
- cash payments to third party financiers in respect of debt loans repayments/redemptions (interest paid is part of operating activities, see below)
- cash receipts in respect of new lease liabilities entered into,
- cash payments in respect of the redemption of lease liabilities – the loan nominal component in the lease term.
Definition: The acquisition and disposal of long-term assets and other investments not included in cash equivalents.
Cash receipts and cash payments relating to non-current assets:
- Cash payments on additions to property plant and equipment (capital expense, purchases of productive longer term available assets),
- Cash payments to obtain financial assets/subsidiaries,
- Cash receipts in respect of sales proceeds in respect of sales of property plant and equipment and sales or redemptions of financial assets,
- Cash receipts in respect of interest income earned and dividends received from investments in financial assets.
Definition: The activities of the entity that are not investing or financing activities.
Cash receipts and cash payments resulting from operations, items included in here are:
- cash payments of salaries and wages,
- cash receipts from trade receivables/customers, government (related) bodies (employee sickness reimbursements) and other operating income (insurance claims),
- cash payments to trade payable/suppliers, government (related) bodies (wage taxes, social securities, corporate income tax) and in respect of other operating expenses (rent, auditor, tax advisers etcetera),
- cash payments to third party financiers in respect of interest paid on debt loans,
- cash payments in respect of the redemption of lease liabilities – the interest nominal component in the lease term.
The statement of cash flows ends with the change in cash and cash equivalents in the year.
Note: Revaluations of property plant and equipment and FX translation differences (other than a reconciliation of change in cash and cash equivalents from average/transaction rates to balance sheet dates) are not included in the statement of cash flows because there is no cash flow related to such items.
Note: In the acquisition of new financial assets/subsidiaries cash and cash equivalents in subsidiaries are netted into the cash payment to acquire subsidiaries and the cash receipts in respect of sales of subsidiaries.