IFRS 16 - Cash Flow Impacts

[Ketan Marwah]

Dear Experts, What would be the cash flow impact of re measurement of lease liability which has a corresponding impact on ROUA? Following guidance available under IAS 7.43 since it is a non cash transaction therefore should just be separately disclosed however I have come across some videos available online that is calculating impacts on a line item basis meaning in this case CFFI and CFFF would get impacted. Maybe a classic case of too many cooks spoil the broth or could also be an interpretation error on my part. Thanks for clarifying in advance. This forum is indeed of great help.

“investing and financing transactions which do not require the use of cash should be excluded from the statement of cash flows, but they should be separately disclosed elsewhere in the financial statements [IAS 7.43]”

[Marek Muc]

this shouldn't have any impact on statement of cash flows

it is a common error to reflect non-cash transactions in the statement of cash flows, e.g.:

https://www.frc.org.uk/getattachment/29 ... -FINAL.pdf

[Ketan Marwah]

Thank you so much Marek. Greatly appreciated. May I also request if you could shed some light on the Cash flow Presentation for the Lessee of: 1) Prepayments (both Upfront and during the lease term) & 2) Lease Incentive Received (Both Upfront and During the Lease term).

The reason for my question is that it is my understanding that whilst within accounting both the items consistently impact ROU Asset (when made/received upfront) and Lease Liability (If made/received during the lease term) whereas for the cash flow statement presentation, prepayments could either be presented as CFFI/CFFF (depending on the timing) but for Lease Incentive received the statement of cash flow presentation is the same as any other lease payment i.e. either CFFO (for Operating Leases) or CFFF (for finance leases). Just struggling to understand the different treatment for the two items for Cash flow presentation specifically when on Balance Sheet they impact the same account.

Once again, thank you for setting up such a wonderful forum where all these accounting queries/thoughts could be exchanged.

[Marek Muc]

yep that may not be all that obvious, unfortunately I don't have all this summarised in the knowledge base and won't have time to prepare in the coming weeks