The correct answer is: D. purchase and retirement of treasury stock.
A statement of changes in financial position, also known as a statement of cash flows, is a financial statement that reports the cash inflows and outflows of a company during a specific period of time. It is used to provide information about a company’s liquidity and solvency.
The statement of changes in financial position typically discloses the following information:
- Cash flows from operating activities
- Cash flows from investing activities
- Cash flows from financing activities
- Net change in cash and cash equivalents
The purchase and retirement of treasury stock is an investing activity. However, it is not typically disclosed on the statement of changes in financial position because it does not affect a company’s cash flow.
When a company purchases treasury stock, it uses cash to buy back its own shares. This reduces the company’s cash balance, but it does not generate any cash flow. Similarly, when a company retires treasury stock, it uses cash to cancel its own shares. This also reduces the company’s cash balance, but it does not generate any cash flow.
Therefore, the purchase and retirement of treasury stock is not typically disclosed on the statement of changes in financial position.
Here is a brief explanation of each option:
- A. share capital issued to acquire productive facilities. This is an investing activity that would be disclosed on the statement of changes in financial position.
- B. Dividends on share declared. This is a financing activity that would be disclosed on the statement of changes in financial position.
- C. cash dividend declared but not yet paid. This is a financing activity that would be disclosed on the statement of changes in financial position.
- D. purchase and retirement of treasury stock. This is an investing activity that is not typically disclosed on the statement of changes in financial position.