CS Executive · Corporate Accounting and Financial Management · Accounting Standards
Under the Conceptual Framework under Ind AS, information about financial performance reflected by accrual accounting may also indicate the extent to which which of the following events has affected the entity's ability to generate net cash inflows?
Financial performance information may show the extent to which changes in market prices or interest rates have increased or decreased the entity's economic resources and claims. These changes affect the entity's ability to generate net cash inflows.
- AChanges in market prices or interest rates that increase or decrease economic resources and claimsCorrect
- BChanges in the personal holdings of the directors
- CChanges in the rates of GST on goods supplied
- DChanges in the registered office address
Explanation
The Framework states that financial performance information may show how far events such as changes in market prices or interest rates have increased or decreased the entity's economic resources and claims, thereby affecting its ability to generate net cash inflows. The other options are not mentioned as such events in the text.
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