CA Final · Financial Reporting · Ind AS 7 Statement of Cash Flows
Under Ind AS 7, how are cash flows defined?
Ind AS 7 defines cash flows as inflows and outflows of cash and cash equivalents. The definition covers both cash and cash equivalents, not cash alone, and it is not the same as adjusted profit.
- AInflows and outflows of cash only
- BInflows and outflows of cash and cash equivalentsCorrect
- CInflows and outflows of cash and all current financial assets
- DNet profit adjusted for non-cash items
Explanation
Cash flows are inflows and outflows of cash and cash equivalents (paragraph 6). Cash alone is too narrow, and net profit adjusted for non-cash items is only a step in the indirect method.
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