Trying to link up the cash flow stmt with the balance sheet here…would the following items from the balance sheet be put in the CFO, CFI, or CFF? - a change in goodwill or intangibles? - “other” long term liabilities? (not sure what this encompasses) - current portion of long term debt? (I thought this would go in the working capital portion of CFO since it is a current liability, but factset appears to put it in CFF) Thanks!
naturallight Wrote: ------------------------------------------------------- > Trying to link up the cash flow stmt with the > balance sheet here…would the following items from > the balance sheet be put in the CFO, CFI, or CFF? > > - a change in goodwill or intangibles? This is a non-cash item that would show up on the income statement and then is backed out in CFO > > - “other” long term liabilities? (not sure what > this encompasses) Typically this is change in long-term debt, so, as debt it paid off, it is a hit to CFF on the cash flow statement or if debt is incurred, CFF is increased > > - current portion of long term debt? (I thought > this would go in the working capital portion of > CFO since it is a current liability, but factset > appears to put it in CFF) Since it is really part of long term debt, arguments can be made to include it under CFO or CFF. > > > Thanks! Hope this helps, TheChad
> >> - current portion of long term debt? (I thought >> this would go in the working capital portion of >> CFO since it is a current liability, but factset >> appears to put it in CFF) > Since it is really part of long term debt, arguments can be made to include it under CFO or CFF. IIRC, GAAP puts it under CFO, but IFRS allows it to be in CFF.
> > > > > - “other” long term liabilities? (not sure > what > > this encompasses) > > Typically this is change in long-term debt, so, as > debt it paid off, it is a hit to CFF on the cash > flow statement or if debt is incurred, CFF is > increased > not necessarily true, this is more likely present value of pension obligations
Jscott24 Wrote: ------------------------------------------------------- > > > > > > > > - “other” long term liabilities? (not sure > > what > > > this encompasses) > > > > Typically this is change in long-term debt, so, > as > > debt it paid off, it is a hit to CFF on the > cash > > flow statement or if debt is incurred, CFF is > > increased > > > > not necessarily true, this is more likely present > value of pension obligations It could be many things, the reason I say change in long-term debt is because of the switch most companies have made to a DC plan. It all depends on the company you are looking at. Best, TheChad
Goodwill will only arise through acquisition of another company and intangibles likewise through purchase of for exampler software. The change should thus be an investing activity. The short term portion of long term debt is only current because it is payable within 12 months. It does not represent a current operating liability such as Trade Payables which are required for day to day core business operations. I think it is important to recognise the purpose that the liability was incurred for, then you can classify it has operating or financing. Most long term debt is incurred to Finance business growth through the purchase of assets. Thus the current portion represents a Financing Activity not an operating one.