Thesis (MBA)--Stellenbosch University, 2001. / ENGLISH ABSTRACT: Users of Cash Flow Statements expect the information provided as cash flow from
operating and investing activities to serve as a possible indicator that the company is
facing bankruptcy. Traditionally, companies disclose depreciation as an operating activity
and replacement of fixed assets as an investing activity. Companies that direct cash
payments toward dividend and future expansion without addressing replacement of fixed
assets are creating an unrealistic picture of their operating and investing activities.
Generally accepted accounting practices (GAAP) have limited its disclosure requirements
and has not addressed the issue of separating the expansion of fixed assets from
replacement.
This mini-study project researches the impact of disclosing depreciation as an investing
activity and the replacement of fixed assets as an operating activity.
Based on the findings, it is recommended that GAAP make it a requirement that the
replacement and expansion of fixed assets be disclosed separately. It is further
recommended that either depreciation be disclosed as an investing activity, or that
replacement of fixed assets be disclosed as an operating activity on the Cash Flow
Statement.
The methods of disclosure investigated in the study will lead to an improvement in the
ability of the two activities to serve as possible early indicators of bankruptcy. / AFRIKAANSE OPSOMMING: Gebruikers van kontantvloeistate verwag dat die inligting wat verskaf word van die
bedryfs- en investeringsaktiwiteite as 'n moontlike indikator van die ondergang van die
onderneming moet kan dien. Waardevermindering word tradisioneel as 'n
bedryfsaktiwiteit openbaar, terwyl die vervanging van vaste bates as 'n
investeringsaktiwiteit openbaar word. Ondernemings wat direkte kontantbetalings as
dividende en toekomstige uitbreiding openbaar sonder dat die vervanging van vaste bates
aangespreek word, skep 'n onrealistiese beeld van hul bedryfs- en investeringsaktiwiteite.
Algemeen aanvaarde rekeningkundige beginsels het die openbaarmakingsvereistes
beperk en spreek nie die skeiding tussen uitbreiding van bates en die vervanging daarvan
aan nie.
Hierdie mini-werkstuk ondersoek die impak van die openbaarmaking van
waardevermindering as 'n investeringsaktiwiteit en vervanging van vaste bates as 'n
bedryfsaktiwiteit.
Gebaseer op die bevindinge word daar aanbeveel dat die algemeen aanvaarde
rekeningkundige beginsels dit 'n vereiste maak dat die vervanging en uitbreiding van
vaste bates apart openbaar word. Verder word aanbeveel dat waardevermindering as 'n
investeringsaktiwiteit of vervanging van vaste bates as 'n bedryfsaktiwiteit in die
kontantvloeistaat openbaar word.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/52464 |
| Date | 12 1900 |
| Creators | January, Carol |
| Contributors | Hamman, W. D., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 119 p. |
| Rights | Stellenbosch University |
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