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

A group finance team is reviewing differences between Ind AS 7 and IAS 7 as listed in the comparison appendix to Ind AS 7. Which statement about those differences is correct?

The correct statement is that Ind AS 7 requires dividend paid to be classified only as financing, while IAS 7 allows an operating classification. The other options either reverse this or wrongly claim optional classification of interest.

  1. AInd AS 7 permits dividend paid to be classified as operating, but IAS 7 requires financing
  2. BInd AS 7 offers non-financial entities the choice of showing interest paid as operating or financing
  3. CInd AS 7 requires dividend paid to be classified as financing only, whereas IAS 7 gives an option to classify it as operatingCorrect
  4. DInd AS 7 requires interest received to be shown in operating activities for every entity

Explanation

The comparison states that IAS 7 gives an option to classify dividend paid as operating, while Ind AS 7 requires financing only. Interest paid and received are likewise fixed as financing and investing, with no operating option. The reversed or optional statements contradict this.

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