CS Executive · Corporate Accounting and Financial Management · Cash Flows
Ind AS 7 requires an entity to present cash flows from operating, investing and financing activities in a manner that is:
Ind AS 7 requires cash flows from operating, investing and financing activities to be presented in the manner most appropriate to the entity's business. The classification helps users assess the impact of each activity on financial position and cash, rather than following a uniform or tax-driven format.
- AMost appropriate to its businessCorrect
- BIdentical for all entities in the same industry
- CBased only on the tax treatment of items
- DDecided by the entity's auditor irrespective of business nature
Explanation
Paragraph 11 of Ind AS 7 says an entity presents these cash flows in a manner most appropriate to its business. It does not prescribe an identical format for all entities, nor does it depend on tax treatment. The classification helps users assess the impact of the activities on financial position.
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