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CA Final · Financial Reporting · Ind AS 7 Statement of Cash Flows

A CFO preparing a comparison note between IAS 7 and Ind AS 7 for Narmada Pharma Ltd states several differences. Which statement is consistent with the Ind AS 7 text?

The consistent statement is that Ind AS 7 requires dividend paid to be classified as financing activity, removing the IAS 7 option to show it as operating. Interest received is likewise fixed as investing, so options suggesting operating or investing treatment for dividend paid are incorrect.

  1. AInd AS 7 permits interest received by non-financial entities to be shown as operating cash flow
  2. BInd AS 7 permits dividend paid to be shown as operating cash flow if disclosed
  3. CInd AS 7 requires dividend paid to be classified as financing, removing an IAS 7 optionCorrect
  4. DInd AS 7 requires dividend paid to be classified as investing, removing an IAS 7 option

Explanation

Ind AS 7 requires dividend paid to be part of financing activity only, whereas IAS 7 lets it be operating. It also removes the option for interest received, which must be investing. The other statements reverse or invent options.

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