UK Why CASH at the end of the year in Cash Flow Statement is not the same as in Balance sheet
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It is Cash and CASH EQUIVALENTS.
In this case, the overdraft is considered as a cash equivalent.
According to IAS 7, if the overdraft is continually overdrawn, then it should be classified as a source of finance, and not a cash equivalent.
However, in this case, it would be reasonable to class it as a CE, as it was zero balance in the previous period.
In this case, the overdraft is considered as a cash equivalent.
According to IAS 7, if the overdraft is continually overdrawn, then it should be classified as a source of finance, and not a cash equivalent.
However, in this case, it would be reasonable to class it as a CE, as it was zero balance in the previous period.