Investing activities

In this lesson

1. 0:00 Investing activities overview
2. 0:18 PPE purchases and sales
3. 0:29 Interest and dividend classification
4. 1:27 Calculating interest paid
5. 3:19 Working out PPE additions
6. 4:58 Depreciation and disposal gains

About this lesson

Investing activities cover the acquisition and disposal of long-term assets and investments—such as purchases and sales of property, plant and equipment, and interest and dividends received. You'll work through practical examples using T accounts to extract the actual cash paid or received for items like interest, PPE acquisitions, and asset disposals, which is essential for accurately preparing the cash flow statement for FA, FM, and SBR papers. The video demonstrates step-by-step how to use ledger accounts when the cash figure isn't immediately obvious. You'll see how to handle interest paid by reconstructing the liability account with opening balances, profit and loss expenses, and closing balances to find the missing cash payment. For non-current assets, you'll learn to separate the cash implications—such as the cost of PPE purchases and proceeds from disposals—from non-cash items like depreciation, which must be adjusted elsewhere in the statement. These techniques ensure you extract the correct figures and classify them accurately, giving you confidence when tackling cash flow questions in your exams.

Duration: 6m