Document ID: chunk:federal_register_of_legislation:F2025C00209:front:0:p19
Version: federal_register_of_legislation:F2025C00209
Segment Type: other
Provision Reference: 
Character Range: 55091–58581

receipts or payments and items of income or expense associated with investing or financing cash flows; or
           2.                    the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed.
          [IFRS for SMEs Standard paragraph 7.7]

Indirect method
      1.                     Under the indirect method, the net cash flow from operating activities is determined by adjusting profit or loss for the effects of:
           1.                    changes during the period in inventories and operating receivables and payables;
           2.                    non-cash items such as depreciation, provisions, deferred tax, accrued income (expenses) not yet received (paid) in cash, unrealised foreign currency gains and losses, undistributed profits of associates and non-controlling interests; and
           3.                    all other items for which the cash effects relate to investing or financing.
          [IFRS for SMEs Standard paragraph 7.8]

      1.                     Alternatively, the net cash flow from operating activities may be presented under the indirect method by showing the revenues and expenses disclosed in the statement of comprehensive income and the changes during the period in inventories and operating receivables and payables.

Direct method
      1.                     Under the direct method, net cash flow from operating activities is presented by disclosing information about major classes of gross cash receipts and gross cash payments. Such information may be obtained either:
           1.                    from the accounting records of the entity; or
           2.                    by adjusting sales, cost of sales and other items in the statement of comprehensive income (or the statement of profit or loss, if presented) for:
                1.                      changes during the period in inventories and operating receivables and payables;
                2.                    other non-cash items; and
                3.                  other items for which the cash effects are investing or financing cash flows.
          [IFRS for SMEs Standard paragraph 7.9]

Reporting cash flows from investing and financing activities
      1.                     An entity shall present separately major classes of gross cash receipts and gross cash payments arising from investing and financing activities. The aggregate cash flows arising from acquisitions and from disposals of subsidiaries or other business units shall be presented separately and classified as investing activities. [IFRS for SMEs Standard paragraph 7.10]

Reporting cash flows on a net basis
      1.                     Cash flows arising from the following operating, investing or financing activities may be reported on a net basis:
           1.                    cash receipts and payments on behalf of customers when the cash flows reflect the activities of the customer rather than those of the entity; and
           2.                    cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short.
      1.                     Examples of cash receipts and payments referred to in paragraph 75(a) are:
           1.                    the acceptance and repayment of demand deposits of a bank;
           2.                    funds held for customers by an investment entity; and
           3.                    rents collected