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If a company issues stocks to pay outstanding debt, should non cash transaction be included in the cash flow statement?

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If a company issues stocks to pay outstanding debt, should non cash transaction be included in the cash flow statement?
posted Aug 16, 2017 by Deepika Jain

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If a company issues stocks or bonds for cash and then pays off the debt, the transaction is reported in the financing section of the statement of cash flows.

If the transaction is a direct conversion of debt to equity (shares of stock) or debt to bonds and no cash receipts or cash payments occur, the transaction is to be disclosed as supplementary information.

This situation and other noncash financing and investing activities are described in Paragraph 32 of the Statement of Financial Accounting Standards No. 95, Statement of Cash Flows.

answer Aug 17, 2017 by Purabi Sarkar
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