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    Question

    A fund transitioned equipment leases under

    Ind AS 116. Principal repayments are now financing outflows. This changed the financing vs operating cash mix. Which metric is directly impacted?
    A Operating cash flow Correct Answer Incorrect Answer
    B Debt-equity ratio Correct Answer Incorrect Answer
    C Free Cash Flow to Firm Correct Answer Incorrect Answer
    D Quick ratio Correct Answer Incorrect Answer
    E None Correct Answer Incorrect Answer

    Solution

    Under Ind AS 116, principal lease payments shift from operating to financing activities, increasing operating cash flows and reducing financing outflows, altering cash flow composition significantly.

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