PSAF discussion on the classification of surpluses paid to National Treasury in the cash flow statement

The PSAF noted that there is uncertainty in practice regarding the classification of a surplus paid back to the National Treasury in the cash flow statement.

The following was discussed:

• An entity should assess the nature of the inflow of funds and how the inflow was classified in the cash flow statement. The return of those funds (outflow) should be classified in the same way as the original inflow. For example, if an entity classifies an inflow from an appropriation as an operating activity, the return of unspent funds related to that appropriation is also classified as an operating activity.
• GRAP 2 on Cash Flow Statements indicates in paragraph .15 that cash receipts from grants or transfers and other appropriations or other budget authority made by national government or other entities are operating activities.