In November 1996 the Accounting Standards Board issued FRS 1 (Revised) - Cash Flow Statements. The appendix to FRS 1 contains a number of examples of cash flow statements drawn up in accordance with the new Standard. The examples given present the cash flows under a number of standard headings, as shown below.

\section*{Requirements}

(a) Describe the cash flows which are reported under each of the headings (i) to (viii), given above.

(b) Summarise the changes which FRS 1 (Revised) made to the old FRS 1, and explain why each change was considered necessary by the Accounting Standards Board.

Transcribed Image Text:

000 (i) (ii) Cash flow from operating activities Returns on investments and servicing of finance (iii) Taxation (iv) Capital expenditure and financial investment (v) Acquisitions and disposals X X X X X X (vi) Equity dividends paid (vii) Management of liquid resources (viii) Financing Decrease in cash in the period X X