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Finance & Accounting
Pages 7 (1757 words)
Name: Instructor: Subject: Date of Submission My Position It is important to note cash equivalent as quite different from cash. Moreover, cash equivalent are not only short-term securities but they are liquid. For a case of IFRM it was considered that an investment is cash equivalent only when it has a very short term maturity of three months or fewer months from the time it was acquired.
This explains why bank overdrafts are not part of financing activities. Additionally, the information presented on cash flow of IFRS is quick and easy to flow. Each entity is supposed to present cash flow statement in such a way that it gives an appropriate reporting of financing activities, investing, and operating. For instance, during the investing activities, it is expected that the firm acquires and uses the long term assets and other activities in the investment process that are not equivalent to cash flow. Additionally, it outlines investment activities as clearly cut and some of the examples of the investment activities undertaken during this time include paying cash to get the service or good to be used in the long-term service. The good or services involved in this case are the long term and intangible assets. Hence they break down into materials used during self construction, to acquire plant or machinery (Stephen & Norbert). Moreover, cash receipts received after selling an acquired asset should be part of investment activities. It generally involves the sale of a plant, property and equipment. Another thing considered is debt instrument or rather sales equity of entities and the interests acquired through the joint ventures. ...
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