CS Executive · Corporate Accounting and Financial Management · Cash Flows
Under Ind AS 7 and AS 3, how should an entity report cash receipts and payments arising from investing and financing activities, except where the standard permits net reporting?
Investing and financing cash flows are reported separately as major classes of gross receipts and gross payments. Net presentation is permitted only for the specific flows covered by paragraphs 22 and 24 of the standards, so a blanket net figure is not acceptable.
- ASeparately, as major classes of gross cash receipts and gross cash paymentsCorrect
- BOnly as a single net figure for each activity
- CCombined with operating activities in one total
- DOnly in the notes, not in the cash flow statement
Explanation
Paragraph 21 of both standards requires major classes of gross cash receipts and gross payments from investing and financing activities to be reported separately. Net reporting is allowed only for the flows described in paragraphs 22 and 24. Showing a single net figure for every activity would breach this rule.
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