I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

Investing activities 

are the acquisition and disposal of long term assets and other investments 

 

not included in cash equivalents. 

 

Financing activities 

are activities that result in changes in the size and composition of the 

contributed equity capital and borrowings of the entity. ' 

(IAS 7, para. 6) 

 

1.6 Cash and cash equivalents 

The standard expands on the definition of cash equivalents: they are not held for investment or other 

long-term purposes, but rather to meet short-term cash commitments. To fulfil the above definition, an 

investment's maturity date should normally be three months from its acquisition date. Usually equity 

investments (ie shares in other companies) are not cash equivalents. An exception would be where 

redeemable preference shares were acquired with a very close redemption date.