The company has some significant noncash investing transactions. The company wants to know if they need to make any disclosures on the cash flow statement in regards to these noncash investing transactions. Determine the reference(s) from the codification system that explains the GAAP guidance on this topic.

GIVEN The company has some significant noncash investing transactions. The company wants to know if they need to make any disclosures on the cash flow statement in regards to these noncash investing transactions. You should advise the client that non-cash investments are required to be disclosed based on GAAP and IFRS requirement because they form a significant impact in identifying the entities ability to generate profits, revenues, and positive cash flows. These informations should be disclosed at the bottom of the statement of cash flow or at a separate disclosure in notes to financial statements. Examples of non-cash investments are: Capital depreciation Investment gains or losses Explanation: Statement of cashflows include those operating, investing, and financing activities of entity that affect cash or cash equivalents. Non-cash investments are important to users of financial informations contained in financial statements because of the significant impact on their current and future performance in terms of revenues, profit and the ability of the entity to generate positive cash flows. Both IFRS and GAAP requires this non-cash investments to be disclosed in the bottom of statement of cash flows. Non-cash investments can also be disclosed in a separate schedule or in the notes to financial statements. This approach is also in accordance with GAAP and IFRS requirement.