What is Non-Cash Transactions?
Non-cash transactions are business events that change reported assets, liabilities or equity but do not involve any movement of cash. Common examples include depreciation, share-based payments, asset revaluations and the conversion of debt into equity. They appear on the income statement or balance sheet but are excluded from the cash flow statement.
How It Works
- Identify entries with no associated cash inflow or outflow.
- Disclose them in the notes when material, per IAS 7.
- Adjust for them when reconciling net income to operating cash flow.
- Keep an audit trail so reviewers can trace each entry.
Saudi Context
Saudi listed companies routinely disclose non-cash items such as IFRS 16 lease additions and share-based payment charges as part of their IAS 7 supplemental notes.
Example
A company that buys a building by issuing shares records a SAR 50 million increase in property and equity, but no cash flow line moves.