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Leases (IFRS 16) in the statement of cash flows (IAS 7)

IAS 7#Leases#IFRS 16#cash flows#IFRS courses#IFRS lectures
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💫 Short Summary

The video provides a practical guide on incorporating leases under IFRS 16 into the statement of cash flows, emphasizing accurate preparation. It covers calculating balance sheet changes, classifying numbers, and making adjustments for non-cash items like depreciation and leases. The importance of separating non-cash items and ensuring total adjustments are zero is highlighted. The video also discusses depreciation, amortization, and handling non-cash items related to property, plant, and equipment. It concludes with a recommendation to verify balance sheet movements and offers further resources for advanced learning.

✨ Highlights
📊 Transcript
Incorporating leases under IFRS 16 into the statement of cash flows.
Details covered include lease payments, lease liability, and amortization of right of use asset.
Importance of preparing the statement of cash flows accurately is emphasized.
Presenter recommends reading an article on the topic for better understanding.
Video provides a straightforward and logical approach to creating the statement of cash flows.
Summary of Cash Flow Statements
Cash flow statements are created by calculating changes in balance sheet items by subtracting opening balances from closing balances.
Plus signs are used for assets and minus signs for liabilities, with the formula being opening balance minus closing balance.
Numbers are then classified into different sections of the statement based on their impact, such as operating, financing, investing, or reconciliation.
Non-cash items are also addressed in the process, and the video emphasizes practical learning and offers detailed courses for deeper comprehension.
Adjustments for non-cash items in financial statements under IFRS 16.
Importance of separating non-cash items like depreciation, amortization, interest expense, and income tax expense.
Process involves making adjustments in separate columns to ensure the total is zero.
Specific adjustments for tax expense, interest expense, and leases are highlighted.
Practical tips provided for handling non-cash items in financial reporting, including classification of interest payments and requirements of IFRS 16 regarding lease liabilities.
Overview of depreciation, amortization, and adjustments for non-cash items in financial statements related to property, plant, and equipment.
Process of adding and deducting amounts in different line items to accurately reflect changes in financial position.
Importance of considering non-cash items when dealing with leases, such as acquisition of assets and lease liabilities.
Emphasis on adding up columns line by line to obtain the statement of cash flows and ensure accuracy in financial reporting.
Importance of verifying balance sheet item movements in a complex statement of cash flows.
Movement of balance sheet items can be understood from the statement itself.
Viewers are encouraged to visit the creator's website for more examples, videos, and advanced courses.
The video ends with a thank you message and prompts viewers to like, share, and visit the website for additional knowledge or support.