Cash flows

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May 28, 2018 at 6:59 pm #454451
herocomesalong
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Hello tutor,
For cash flows that do not get classified into any of the activities (e.g. research expense), do we need to add them back to net profits when determining cash flows from operations?
May 28, 2018 at 9:02 pm #454498
P2-D2
Keymaster
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Hi,
No we don’t as it is a cash expense and so will reduce cash and also profits. We only need to adjust items where there is a profit impact but no cash impact.
Thanks
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