Skip to content

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

Ganga Pharma Ltd reports under Ind AS and its finance head asks how dividends paid to shareholders may be presented in the cash flow statement. IAS 7 allows dividend paid to be shown as an operating item. What does Ind AS 7 require?

Ind AS 7 requires dividend paid to be classified as a financing activity only. Unlike IAS 7, which permits showing it as an operating item, Ind AS 7 gives no option, so the entity cannot choose operating classification.

  1. AOperating activity or financing activity, at the entity's choice
  2. BInvesting activity, as it is a return on investment
  3. CFinancing activity onlyCorrect
  4. DOperating activity only, because dividends relate to profits

Explanation

The comparison with IAS 7 states that Ind AS 7 requires dividend paid to be classified as part of financing activity only. The operating option in IAS 7 is not available. Option A is wrong because there is no choice.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 7 Statement of Cash Flows shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 7 Statement of Cash FlowsFree diagnostic mock

More Ind AS 7 Statement of Cash Flows questions