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Telfer Corp is a publicly listed company reporting under IFRS. For the issue of common shares...

Telfer Corp is a publicly listed company reporting under IFRS. For the issue of common shares in exchange for equipment, indicate where, if at all, the dollar value would be included in the calculations showing the change in cash on the statement of cash flows -

Question 18 options:

Operating activities section

Investing activities section

Financing activities section

The transaction does not represent a cash flow and needs to be disclosed in the notes to the statement of cash flows.
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Answer #1

Solution:

Issue of Common shares in exchange of equipment. In this transaction common shares are issued and equipment is taken against the common shares.

In this transaction there is no cash inflow and outflow so this transaction will not affect any section of cash flow statements.

This is non cash flow transaction and this transaction is disclosed in the notes to the statement of cash flows.

Answer = Option 4 = The transaction does not represent a cash flow and needs to be disclosed in the notes to the statement of cash flows

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