Which transaction among the following is NOT disclosed in the cash flow statement due to the non-cash nature of the transaction?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Assets acquired by issue of shares.
The cash flow statement reports only transactions that involve actual cash inflows or outflows. Non-cash transactions are not included in the cash flow statement. Assets acquired by issue of shares – This is a non-cash transaction because no cash changes hands; the company acquires assets in exchange for equity. It is not disclosed in the cash flow statement.
OTHER OPTIONS
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Disposal of Equipment and non-current investments – This involves receiving cash for the sale, so it's a cash inflow and is disclosed in the cash flow statement in investing activity.
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Redemption of preference shares – This involves paying out cash to shareholders, so it's a cash outflow and is disclosed in the cash flow statement under financing activities.
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Sale of property – This involves receiving cash and is therefore a cash inflow, usually shown under investing activities in the cash flow statement.