Document ID: chunk:federal_register_of_legislation:F2025C00209:front:0:p21
Version: federal_register_of_legislation:F2025C00209
Segment Type: other
Provision Reference: 
Character Range: 61177–64271

interest and dividends received and paid. The entity shall classify cash flows consistently from period to period as operating, investing or financing activities. [IFRS for SMEs Standard paragraph 7.14]
      2.                     An entity may classify interest paid and interest and dividends received as operating cash flows because they are included in profit or loss. Alternatively, the entity may classify interest paid and interest and dividends received as financing cash flows and investing cash flows respectively, because they are costs of obtaining financial resources or returns on investments. [IFRS for SMEs Standard paragraph 7.15]
      3.                     An entity may classify dividends paid as a financing cash flow because they are a cost of obtaining financial resources. Alternatively, the entity may classify dividends paid as a component of cash flows from operating activities because they are paid out of operating cash flows. [IFRS for SMEs Standard paragraph 7.16]

Income tax
      1.                     An entity shall present separately cash flows arising from income tax and shall classify them as cash flows from operating activities unless they can be specifically identified with financing and investing activities. When tax cash flows are allocated over more than one class of activity, the entity shall disclose the total amount of taxes paid. [IFRS for SMEs Standard paragraph 7.17]

Non-cash transactions
      1.                     An entity shall exclude from the statement of cash flows investing and financing transactions that do not require the use of cash or cash equivalents. An entity shall disclose such transactions elsewhere in the financial statements in a way that provides all the relevant information about those investing and financing activities. [IFRS for SMEs Standard paragraph 7.18]
      2.                     Many investing and financing activities do not have a direct impact on current cash flows even though they affect the capital and asset structure of an entity. The exclusion of non-cash transactions from the statement of cash flows is consistent with the objective of a statement of cash flows because these items do not involve cash flows in the current period. Examples of non-cash transactions are:
           1.                    the acquisition of assets either by assuming directly related liabilities or by means of a lease;
           2.                    the acquisition of an entity by means of an equity issue; and
           3.                    the conversion of debt to equity.
          [IFRS for SMEs Standard paragraph 7.19]

Components of cash and cash equivalents
      1.                     An entity shall present the components of cash and cash equivalents and shall present a reconciliation of the amounts presented in the statement of cash flows to the equivalent items presented in the statement of financial position. However, an entity is not required to present this reconciliation if the amount of cash and cash equivalents presented in the statement of cash flows is identical to