Acca financial Accounting (FA) Study Text ac ca (FA)

Chapter 19 

KAPLAN PUBLISHING

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Note that IAS 7 permits interest paid to be classified as a cash outflow within 

either operating activities or as a financing activity. The important point is to 

ensure that the cash outflow for interest paid in the year is classified either 

within operating activities or within financing activities and not included twice 

within the statement of cash flows. 

Calculation of the proceeds from the issue of shares is derived by comparison 

of the amounts included in the statement of financial position brought forward 

and carried forward on two accounts: 

•

share 

capital

•

share 

premium.

Note that, if there is a bonus issue made in the year, this will not result in a cash 

inflow.