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Hello Sir,
Can you please help me with the following questions:
When we make cash flow statement, we can use either direct or indirect method. My question is: Is direct method applied only to “Net cash flow from operating activities” section or all three (operating, investing, financing) sections can be made using direct method?
Can Sole trader and partnership revalue their non-current assets, if yes, then where revalued gain or loss is shown in SoFP?
Thank you
The two methods only affect the cash flows from operating activities – everything else in the statement remains the same.
I do suggest that you watch my free lectures on this – the lectures are a complete free course forPaper F3 and cover everything needed to be able to pass the exam well.Sole traders can revalue their assets but it is normally only limited companies (and will only be limited companies in the exam). If they did revalue then the gain goes to their capital account.
Partnerships are not in the syllabus for Paper F3.
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