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MASB5 Cash Flow Statements pg6

Appendix 1

Compliance with International Accounting Standards

The requirements of this Standard are consistent, in all material respects, with International Accounting Standard IAS 7 (revised), Cash Flow Statements.

Appendix 2

Cash Flow Statement for an Enterprise other than a Financial Institution

The appendix is illustrative only and does not form part of the standards. The purpose of the appendix is to illustrate the application of the standards to assist in clarifying their meaning.

The examples show only current period amounts. Corresponding amounts for the preceding period are required to be presented in accordance with MASB 1, Presentation of Financial Statements.

Information from the income statement and balance sheet is provided to show how the statements of cash flows under the direct method and indirect method have been derived. Neither the income statement nor the balance sheet are presented in conformity with the disclosure and presentation requirements of MASB Standards.

The following additional information is also relevant for the preparation of the statements of cash flows:

all of the shares of a subsidiary were acquired for RM590. The fair values of assets acquired and liabilities assumed were as follows:

	(RM)
inventories	100
accounts receivable	100
cash	40
property, plant and equipment	650
trade payables	100
long-term debt	200

RM250 was raised from the issue of share capital and a further RM250 was raised from long-term borrowings.

interest expense was RM400 of which RM170 was paid during the period. RM100 relating to interest expense of the prior period was also paid during the period.

dividends paid were RM1,200.

the liability for tax at the beginning and end of the period was RM1,000 and RM400 respectively. During the period, a further RM200 tax was provided for. Withholding tax on dividends received amounted to RM100.

during the period, the group acquired property, plant and equipment with an aggregate cost of RM1,250 of which RM900 was acquired by means of finance leases. Cash payments of RM350 were made to purchase property, plant and equipment.

plant with original cost of RM80 and accumulated depreciation of RM60 was sold for RM20.

accounts receivable as at end of 20-02 include RM100 of interest receivable.

Consolidated Income Statement for the period ended 20-02

	(RM)
Sales	30,650
Cost of sales	(26,000)
Gross profit	--------------------- 4,650
Depreciation	(450)
Administrative and selling expenses	(910)
Interest expense	(400)
Investment income	500
Foreign exchange loss	(40)
Net profit before taxation and extraordinary item	--------------------- 3,350
Extraordinary item - Insurance proceeds from earthquake disaster settlement	================= 180
Net profit after extraordinary item	--------------------- 3,530
Taxes on income	(300)
Net Profit	--------------------- 3,230 ========

Consolidated Balance Sheet as at end of 20-02

		20-02		20-01
		(RM)		(RM)
Assets:
Cash and cash equivalents		410		160
Accounts receivable		1,900		1,200
Inventory		1,000		1 ,950
Portfolio investments		2,500		2,500
Property, plant and equipment at cost	=============== 3,730	===============	=============== 1,910	===============
Accumulated depreciation	(1,450)		(1,060)
Property, plant and equipment net	-------------------	2,280	-------------------	850
Total assets		------------------- 8,090 ========		------------------- 6,660 ========
Liabilities:
Trade payables		250		1,890
Interest payable		230		100
Income taxes payable		400		1,000
Long term debt		2,300		1,040
Total liabilities		------------------- 3,180 -------------------		------------------- 4,030 -------------------
Shareholders' Equity
Share capital		1,500		1,250
Retained earnings		3,410		1,380
Total shareholders equity		------------------- 4,910		------------------- 2,630
Total liabilities and shareholders equity		------------------- 8,090 ========		------------------- 6,660 ========

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