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in BPP ACCA F3 Kit, 19.4, page 88, i dont understand interest paid/received part. first we add 75 interest epxense and deduct 25 interest income, but at the end of “operating activities” we deduct 75 and add 25.
Interest paid does not affect operating profit (which is profit from trading) so it is added back to the profit and then has to be disclosed separately as a deduction from cash generated from operations.
Similarly interest received does not affect the operating profit, and so is subtracted from the profit, but then has to be disclosed separately under the heading ‘cash flows from investing activities’.
Have you watched the free lectures on statements of cash flows? 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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