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In cashflow from financing acitivities,
for right of use asset we have deducted 570 (2300+1500-570)
why have we deducted the 570, isnt that an expense rather than a cashflow?Oh i get it. We have added back the interest expense of 570 back to the profit before tax. But dont we do it in investing activities?
No, the start figure in a statement of cash flow is “Profit before interest and tax” so, where interest has already been deducted in arriving at the profit figure in the question, it’s necessary to add it back
And then deduct it as a negative cash flow within the Operating Activities section
OK?
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