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Hi! May i know the logic behind deducting investment incomes when using the indirect method? I understand that you need to add back depreciation etc since there is no real outflow of cash but why deduct investment income? Isnt the income from investment an inflow of cash?
Thnx!Investment income is an inflow of cash, but it is shown under the heading ‘cash flows from investing activities’ rather than under the heading ‘cash flows from operating activities’.
Have you watched my free lectures on this? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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