Cash Flow Statement - Enhanced Charts

Step 1) Debtor Balances Trade debtor balances are automatically calculated by IRIS. Complete the Analysis of Debtors data screen to allocate account balances within “Other debtors” and “Prepayments and accrued income” to the relevant sections of the Cash Flow Statement. This must be done for the current, comparative and pre-comparative years. Example: Account 594 is a debtor balance relating to the sale of an investment. The account total should therefore be entered in the “Other debtors” column as “Sale of investments”. If the debtor balance relates to a section of the Cash Flow Statement that is not listed e.g. Financing, then enter the balance as “Other cash flow headings”. ! An Error Message results if the screen totals do not reconcile to the trial balance in each year Step 2) Creditor Balances Trade creditor balances are automatically calculated by IRIS. Complete the Analysis of Creditors data screen to allocate account balances within “Other creditors” and “Accruals and deferred income” to the relevant sections of the Cash Flow Statement. This must be done for the current, comparative and pre-comparative years. Example: Account 786 is a creditor balance relating to an interest charge. The account total should therefore be entered in the “Accruals and deferred income” column as “Interest paid”. If the creditor balance relates to a section of the Cash Flow Statement that is not listed e.g. Management of Liquid Resources, then enter the balance as “Other cash flow headings”. ! An Error Message results if the screen totals do not reconcile to the trial balance in each year Step 3) Loans It is assumed that all loans (and debentures) have been posted to accounts 839-898 in the current, comparative and pre-comparative years. The movement in these accounts must be explained by: Entering the value of new loans in the Financing data screen (as a positive figure) Entering the value of loan repayments in the Financing data screen (as a negative figure) ! An Error Message results if a) and b) do not explain the movement in the trial balance accounts Step 4) Hire Purchase & Finance Leases It is assumed that obligations under hire purchase contracts and finance leases have been posted to accounts 909-920 in the current, comparative and pre-comparative years. The movement in these account balances during the year should be split into: The value of fixed assets acquired under hire purchase contracts or finance leases, as entered in the Reconciliation to Net Debt data screen (as a negative figure) The capital element of repayments on hire purchase contracts and finance leases, as calculated by IRIS Step 5) Additional Disclosures Enter any additional reconciling items required for the Reconciliation of Operating Profit in Note 1, in the Reconciling Items data screen. If necessary use the Acquisitions and Disposals data screen to disclose any cash flows which should fall under this heading in the Cash Flow Statement. If necessary use the Management of Liquid Resources data screen to disclose any cash flows which should fall under this heading in the Cash Flow Statement. If necessary use the Additional items section of the Financing data screen to disclose any cash flows relating to group balances (accounts 715-724). Enter any relevant non-cash changes in the Analysis of Changes in Net Debt data screen, for example reclassifications between short and long term debt. Step 6) Produce the Cash Flow Statement The Cash Flow Statement will be produced as part of the LTD or LLP report if the company has been categorised as type ‘M’ in the Size of Company data screen. The Cash Flow Statement can also be generated independently by selecting Reports | Annual and running the CFS report. In either case a series of checks will be made on the Cash Flow Statement and potential problems will be highlighted in an exception report. The exception report will also suggest corrective action to solve these problems. Step 7) Check the Cash Flow Statement The majority of cash flows in the Cash Flow Statement are calculated by IRIS directly from the trial balance. These cash flows should be checked and if necessary adjusted using the client data screens. Rounding differences – Where there is a small rounding difference on the Cash Flow Statement, an adjustment should be made in either the ‘Analysis of Debtors’ or ‘Analysis of Creditors’ data screen (it is up to the individual as to which screen to use). The adjustment should be made by either adding or subtracting the rounding amount to the ‘Operating Activities’ figure and making an opposite adjustment to the ‘Other cash flow headings’. By making both entries, the total at the bottom of the screen should be the same. NOTES Differences between treatment of figures on the Standard chart and Enhanced charts. Standard chart account number Enhanced chart treatment 158 and 159 – Tax accounts Enter into taxation data screen. 460-463 and 465-468 – Exceptional items Enter into Note 1 – Reconciling items data screen. 464 and 469 – Exceptional items Enter into Note 2 – Financing data screen. 895-900 and 903-910 – Financing cash flow accounts Picked up automatically by IRIS. Can be amended in Note 2 – Financing data screen. 901 and 902 – Loan cash flow accounts Enter into Note 2 – Financing data screen. 953 and 968 – Trade debtor and creditor cash flow accounts Picked up automatically by IRIS. Can be amended in Analysis of Debtors or Analysis of Creditors data screens. 954-964 – Debtor cash flow accounts Enter into Analysis of Debtors data screen. 969-979 – Creditor cash flow accounts Enter into Analysis of Creditors data screen. 965 and 980 – Debtor and Creditor financing cash flow accounts Enter into analysis of Debtors or Analysis of Creditors data screens, in the Other cash flow headings box.