CS Executive · Corporate Accounting and Financial Management · Cash Flows
Under Ind AS 7 and AS 3, how must major classes of cash receipts and payments from investing and financing activities generally be reported?
Major classes of gross cash receipts and gross cash payments from investing and financing activities must be reported separately, as paragraph 21 of Ind AS 7 and AS 3 requires. Net reporting is allowed only for the cash flows described in paragraphs 22 and 24.
- AOn a net basis for every class, to keep the statement short
- BSeparately as gross receipts and gross payments, except where the standard permits net reportingCorrect
- COnly as a single combined figure for investing and financing
- DOnly in the notes, not in the cash flow statement
Explanation
Paragraph 21 of both standards says an entity reports separately major classes of gross cash receipts and gross cash payments from investing and financing activities. The exception is cash flows covered by paragraphs 22 and 24, which may be reported net. Net reporting for every class is therefore wrong.
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