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CA Final · Financial Reporting · Ind AS 7 Statement of Cash Flows

Which combination correctly describes differences between IAS 7 and Ind AS 7 for an entity other than a financial entity, as stated in the Ind AS 7 comparison appendix?

IAS 7 gives options to show interest paid, interest and dividends received, and dividend paid as operating items. Ind AS 7 removes these options, requiring interest paid and dividend paid in financing activities and interest and dividends received in investing activities.

  1. AIAS 7 allows interest paid and interest and dividends received as operating items and dividend paid as an operating item; Ind AS 7 requires interest paid and dividend paid in financing and interest and dividends received in investingCorrect
  2. BIAS 7 requires interest paid in financing; Ind AS 7 allows it in operating activities at the entity's choice
  3. CInd AS 7 allows dividend paid in operating activities but requires interest received in financing activities
  4. DInd AS 7 and IAS 7 are identical on classification of interest and dividends

Explanation

The appendix states IAS 7 gives an option to classify interest paid and interest and dividends received as operating cash flows, and also gives an option for dividend paid as operating. Ind AS 7 removes both options: interest paid and dividend paid go to financing, while interest and dividends received go to investing. The other options reverse or deny these differences.

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