Question

general understanding of non cash investing and financing activities and its disclosure requirement on a financial...

general understanding of non cash investing and financing activities and its disclosure requirement on a financial statement

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Answer #1

The general understanding of non-cash investing and financing activities is that the non-cash investing is compensated by the non-cash financing. The users of the financial statements are required to understand the following Non-cash investing and financing activities :

1) Buying assets of issuing stock or bonds.

2) One asset (non-cash) got exchanged with another non-cash asset.

3) Debts got retired by issuing stocks.

4) Conversion of debt to common stock.

Both IFRS and GAAP requires disclosure of the Non-cash investing and financing activities below the cash flow statements and other financial statements under a different schedule.

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