What is Noncash investing and financing activities?
In short
Noncash investing and financing activities are significant transactions that affect assets, liabilities or equity but involve no cash, such as acquiring land by issuing stock. They are disclosed separately rather than shown in the statement's sections.
Key takeaways
- Examples: converting bonds into stock, acquiring assets with debt or a finance lease, and exchanging one noncash asset for another.
- Any cash part of a transaction is reported in the statement; only the noncash part is disclosed.
- They can appear in a schedule or in narrative form.
Where it's tested
FAR: Statement of Cash Flows — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A company acquires a building by issuing common stock directly to the seller. How is this reported?