Question
An entity, other than a financial institution, receives
the dividends from the shares it owns in certain companies. The entity, while preparing its cash flow statement, should disclose this as ______Solution
As per AS-3 and Ind AS 7, for entities other than financial institutions, dividends received are classified as cash inflows from investing activities, because they represent returns on investments in other entities. Note – Cash flows which arise from dividends and interest received and paid in the case of financial entity must be categorized as cash flows from operating activities.Â
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