- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 4. Analyzing Statements of Cash Flows I
- Subject 4. The Indirect Method
CFA Practice Question
Which one of the following must be disclosed separately on the statement of cash flows prepared under the indirect approach?
B. Interest paid
C. Dividends received
D. Income tax paid on a gain from the sale of assets
A. Interest received
B. Interest paid
C. Dividends received
D. Income tax paid on a gain from the sale of assets
Correct Answer: B
If the user believes interest paid is part of financing activities, the user can easily reclassify interest paid from the net cash flow from operating activities.
User Contributed Comments 5
| User | Comment |
|---|---|
| surob | Why? |
| surjoy | Even IT paid also should be report for indirect approach. |
| thekid | I Don't understand - can someone please explain. |
| gill15 | Just straight definition of how its presented. Gaap does not require that int and taxes be disclosed as separate line it CF statement but does require the amounts provided in supplemental note. |
| pk84 | IFRS requires Interest & Taxes paid to be disclosed separately. |