ACC2100 Lecture Notes - Lecture 11: Joint Venture, Equity Method

• School: Monash Caulfield
• Department: Accounting
• Course: ACC2100
• Professor: Dr Dharmendra Naidu

Document Summary

Operating activities: revenue-producing activities and other activities that are not investing nor financing activities. Investing activities are the acquisition and disposal of non-current assets and other investments not included in cash equivalents. Financing activities are activities result in changes in size and composition of the contributed capital equity and borrowings of the entity. The state(cid:373)e(cid:374)t of (cid:272)ashflo(cid:449) represe(cid:374)ts the (cid:272)ash flo(cid:449)s ge(cid:374)erated (cid:271)y the e(cid:374)tity"s (cid:271)usi(cid:374)ess operation. The amount of cash flows indicates the cash sufficency of the entity to repay loans, maintain operating activities, pay dividends, make new investment without the help of external finance resource. An entity that makes profit but keeps on losing cash or needing more cash from its stakeholders does not have a sustainable future. Cash is cash on hand and demand deposits. For example: notes and coins, deposits held by other entities available on demand. They must be readily convertible to cash and short-term investments, and an insignificant risk of changes in value.