British Telecommunications Plc (BT), a U.K. company, is the world’s oldest commu

Question

British Telecommunications Plc (BT), a U.K. company, is the world’s oldest communications company. The company prepares its financial statements in accordance with International Financial Reporting Standards. Locate BT’s statement of cash flows from it’s website at www.btplc.com.
Required:
1. What are the primary classifications into which BT’s cash inflows and cash outflows are separated?

2. Is this classification the same as or different from cash flow statements prepared in accordance with U.S. GAAP?

3. How are cash inflows from dividends and interest and cash outflows for dividends and interest classified in BT’s cash flow statements?

4. Is this classification the same as or different from cash flow statements prepared in accordance with U.S. GAAP?

Explanation / Answer

1. The primary classifications into which BT's cash inflows and cash outflows are separated is mentioned below:

a. Operating Activities is showing Cash Inflow.

b. Investing Activities and Financing Activites are showing Cash Outflow.

2. This classification is same as cash flow statements prepared in accordance with U.S. GAAP.

3. Cash Inflows from dividends and interest are shown under the Investing Activities, Cash Outflows for dividends and interest are shown under the Financing Activities.

4. This classification is different as cash flow statements prepared in accordance with U.S. GAAP. Under US GAAP Interest received, dividend received and Interest paid are shown under operating activities.

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