In November 1996 the Accounting Standards Board issued FRS 1 (Revised) – Cash Flow Statements. The appendix to FRS 1 contains a number of examples of cash flow statements drawn up in accordance with the new Standard. The examples given present the cash flows under a number of standard headings, as shown below.
|
£000 |
||
|
(i) |
Cash flow from operating activities |
X |
|
(ii) |
Returns on investments and servicing of finance |
X |
|
(iii) |
Taxation |
X |
|
(iv) |
Capital expenditure and financial investment |
X |
|
(v) |
Acquisitions and disposals |
X |
|
(vi) |
Equity dividends paid |
X |
|
X |
||
|
(vii) |
Management of liquid resources |
X |
|
(viii) |
Financing |
X |
|
Decrease in cash in the period |
X |
Requirements
(a) Describe the cash flows which are reported under each of the headings (i) to (viii), given above.
(b) Summarise the changes which FRS 1 (Revised) made to the old FRS 1, and explain why each change was considered necessary by the Accounting Standards Board.