CASH FLOW STATEMENT

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Shrivatsa (Querist)
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26 January 2011
Hello All,

Recently I came across a cash flow statment in which PROCEEDS FROM ISSUE OF COMMON STOCK IS NEGATIVE.
Can you please let me know under what circumstances it will be negative.
Financial statments were prepared under IFRS.

Regards,
Shrivatsa

Kumar

Kumar (Expert)
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26 January 2011
1. Primafacie, it appears that the amount is presented against a wrong description
'PROCEEDS FROM ISSUE OF COMMON STOCK'

2. But the negative amount may represent the following:

a) Advance against share capital had been received in the previous years and issue of shares is taking place in the Current year. Here the issue price decided is less than the price based on which the advance was given and hence the difference refunded to the equity shareholder.

b)Cross check with the Statement of Other comprehensive income to understand if there is any such adjustment which will debit Reserves & Surplus and has been shown against the line item mentioned by you.

Vishal Sharma

Vishal Sharma (Expert)
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27 January 2011 Also possible in case of buy back of shares

Shrivatsa

Shrivatsa (Querist)
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27 January 2011 Rajesh and Vishal,
The company which I was referring above is Telefonica, spanish telecom service provider.
Now I went through the annual report for 2005 for Telefonica, 2005 is the year when they changed from Spanish GAAP to IFRS.
There are many adjustments that directly affects equity under IFRS.
May be you can go through the same and let me know your insight.

https://informeanual.telefonica.es/ing/index.jsp?co=es

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