Two Silly Questions !!

first, net, valuation, increase, previous

Q1. What will be the treatment of increase in “NonCash operating net working capital” in order to calculate CFO under indirect method? and WHY?
*Non Cash Operating NWC = Receivable + Inventories Payables
Q2. Can anyone explain me the treatment of Property, Plant & Equipment under IFRS when..
A. they are valued downwards for the first time?
B. they are valued downwards after the upward valuation?
C. they are valued upwards for the first time?
D. they are valued upwards after the previous devaluation?

morebeans

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发表于 2013-4-10 23:54 | 只看该作者

>Q1. What will be the treatment of increase in “NonCash operating net working capital” in order to calculate CFO under indirect method? and WHY?
>*Non Cash Operating NWC = Receivable + Inventories Payables
Any increase in noncash expense is added back to net income in indirect CFO reporting. You are looking at the cash conversion cycle and this is one measurement of liquidity. Are you thinking of free cash flow for the firm? Thats a different equation.
>Can anyone explain me the treatment of Property, Plant & Equipment under IFRS when..
>A. they are valued downwards for the first time?
>B. they are valued downwards after the upward valuation?
>C. they are valued upwards for the first time?
>D. they are valued upwards after the previous devaluation?
a. Losses on revaluation are reported on income statement after tax line in nonreoccuring income
b. imagine the same revaluation would take place, as reported on income statement after tax line in nonreoccuring income
c. Gains on revaluation are reported on equity section of balance sheet
d. Gains on revaluation are reported on income statement to the extent of previous losses, and then on equity section of balance.

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hanvinh

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发表于 2013-4-10 23:54 | 只看该作者

Thanks Chefe.. You have explained it well and just the way i was expecting the answers to be given.. Cheers!
@bizzies4bankers
Q1 has nothing to do with the cash conversion cycle or FCFF. I came across this question in QBank. We only had to tell the the effect of increase/decrease in Non Cash Operating NWC. No specific assets and liabilities accounts given.

Operating NWC = Cash + Receivables + Inventory Payables
and
Non Cash Operating NWC = Receivables + Inventory Payables

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