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CMA Intermediate · Corporate Accounting and Auditing · Cash Flow Statement

Under Ind AS 7, how must an entity report cash receipts and payments arising from investing and financing activities, apart from items permitted to be reported net?

An entity must report major classes of gross cash receipts and gross cash payments from investing and financing activities separately, except for the cash flows that the standard allows to be reported net. Showing only a net total would not comply.

  1. AOnly the net total of all investing and financing flows
  2. BSeparately as major classes of gross cash receipts and gross cash paymentsCorrect
  3. CCombined with operating flows in a single line
  4. DOnly the flows exceeding 10% of total cash flows

Explanation

Ind AS 7 requires an entity to report separately major classes of gross cash receipts and gross cash payments arising from investing and financing activities, except where cash flows are permitted to be reported on a net basis. Netting everything would breach this requirement.

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