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The depreciation expense in accordance with international accounting standards: A - operating cash flow. B - cash flow financing. C - cash flow investment. D - None of the above.
A is the answer. Depreciation are adjusted in the cash flow statement under the Cash flow from operating activity by adding back to the net profit balance before tax deduction together with other expense/deduction items without actually monetary value exchange/in or out flow i.e Amortization/impairment of intangible items and profit on disposal of Asset/investment are added back or subtracted before effecting changes in working capital and actual tax paid to arrive at Net operating cash in/out flow balance. Sale of investment and disposal of Asset are consider under investing activity/ cash flow statement column with the cash proceed/received each respectively.
Depreciation is added back to profit before tax as it is NOT A CASH item and this is part of workings to get to the "cash from operations", item so A) is correct,
Under IAS 7, cash flow statement depreciation is added back to the net income figure to arrive cash flow from operations. So the answer is:
A - Operating cash flow
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A is right answer.
D
B - cash flow financing.
The depreciation expense in accordance with international accounting standards?
The depreciation expense in accordance with international accounting standards: A - operating cash flow.
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