Answer
Many activities in a company are non-cash activities which do not involve cash. Non Cash activities are not reported in the body of the statement of cash flows.
Instead, companies mention all the non-cash activities in either a separate schedule which is maintained at the bottom of the statement of cash flows or maintained in a separate schedule or sometimes a supplementary schedule is maintained to the financial statements.
Company FC also reports "Non cash investing and financing activities" at the bottom in a separate schedule of its statement of cash flows.
Work Step by Step
Some examples of significant non-cash transactions which will be reported in this section are:
Issuing Common stock to purchase assets of a company.
Converting bonds of the company into common stock,
Issuing debt of the company to purchase assets.
Non cash activities are therefore disclosed in a separate schedule to satisfy the full disclosure principle.
