Question
UKAF4034 Advanced Corporate Reporting) Question 2 At 30 June 20X7, Setia Bhd has investments in several associate companies. Setia Bhd is the only entity
UKAF4034 Advanced Corporate Reporting) Question 2 At 30 June 20X7, Setia Bhd has investments in several associate companies. Setia Bhd is the only entity of the group which operates a defined benefit pension scheme. The pension scheme obligation increased during the year from RM1.175m to RM6.368m. The movement on the pension liability represents the service cost component, the net interest component and also the remeasurement component for the year. Setia usually makes cash contributions into the scheme on an annual basis towards the year end. The significant increase in the pension scheme obligation for the year ended 30 June 20X8 was because the contributions to the scheme did not follow normal practice and were instead made in July 20X8. Benefits paid during the year were RM2 million in cash. Required: Describe the impact, if any, that the defined benefit pension scheme will have on the consolidated statement of cash flows for the Setia group for the year ended 30 June 20X8 assuming that cash flows from operating activities are calculated by the indirect method.
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