Millan 8 Conceptual Framework Acctg Standards by Zeus Vernon B Millan 9 Core

Millan 8 conceptual framework acctg standards by zeus

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Millan) 8
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Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 9
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Core principle Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 10
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Interests and Dividends Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 11
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Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 12
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Only interests and dividends received and paid in cash are included in the statement of cash flows. For example, dividends declared in Year 1 but paid in Year 2 are excluded from the statement of cash flows in Year 1 and reported only in Year 2 Only option 1 is available to financial institutions When answering CPA board questions wherein the problem is silent, it is presumed that the entity uses option 1 Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 13
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Reporting cash flows from operating activities 1. Direct method - shows each major class of gross cash receipts and gross cash payments. 2. Indirect method - adjusts accrual basis profit or loss for the effects of changes in operating assets and liabilities and effects of non-cash items. Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 14
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PAS 7 does not require any particular method; both methods are acceptable However, PAS 7 encourages the direct method because it provide information that may be useful in estimating future cash flows which is not available under indirect method. In practice, however, the indirect method is more commonly used because it is easier to apply. Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 16
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Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 17
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Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 18
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Disclosures PAS 7 requires the following disclosures o Components of cash and cash equivalents and a reconciliation of amounts in the statement of cash flows with the equivalent items in the statement of financial position o Significant cash and cash equivalent held by the entity that are not available for use by the group, together with a management commentary Conceptual Framework & Acctg.
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