Thanks. The company have an item in the working capital section of the CF statement "payment to Pension Fund" of negative GBP100m.

Is the CF statement direct or indirect method? if direct method, then that means they paid GBP100, if indirect that means they paid GBP100 MORE THAN whatever was recognized as an expense, exclusive of adjustments.

Recall that pension expense is technically included in Compensation (usually part of SG&A). That does not necessarily mean they physically paid cash for that expense in that time period (matching principle of expenses, subset of accrual accounting). Therefore, the contribution to pension would b... Recall that pension expense is technically included in Compensation (usually part of SG&A). That does not necessarily mean they physically paid cash for that expense in that time period (matching principle of expenses, subset of accrual accounting). Therefore, the contribution to pension would be a working capital figure. Thus, if you were to include payments to Company Pension Fund as a negative item in CFO, that would imply that they paid MORE than the accrual expense amount recognized on the Income Statement. However, keep in mind that the CFO figures are partly derived also from the BS figures - that is, if there is an actuarial change in pension assets, then that change is reflected in CFO and possibly further distorting the true cash changes to pension. In short, you need to figure out exactly what is going on with the company and then model that out as close to reality as you can. Read More