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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Cash flow statement – non cash items adjustment
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’.
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