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2.3.2 Cash Flow from Investing Activities
When referring to IAS 7 paragraph 6 (International Reporting Standard 2005),
cash flow from investing activities is defines as “the acquisition and disposal of
long-
term assets
and
other
investments
not
included
in
cash
equivalents”.
Additionally,
investing activities are the second most
important activities
after
operating
activities.
The
investing
activities
associated with
acquiring
of
investments,
PPE
(property,
plant,
equipment)
and
lending
money
and
collecting the
loans (Weygandt
et all, 2005 p. 712). Generally, the
items
from
the investing activities resulted from the
changes
in
investment,
non-current
liability as well as shareholder’s equity items.
Investing Activities- Changes in Investments and Long Term Assets
Cash Inflow:
From sale of property, plant and equipment
From sale if debt or equity secutirites of other entities
From collection of principle on loans to other entities
Cash outflow:
To purchase property, plant and equipment
To purchase debt or equity securitites or other entities
To make loansto other entities
Table 2.7. Cash Flow from Investing activities
From: Accounting Principles, 2005
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