Cashflows from financing activities
Financing activities are those activities that will lead to either an increase or decrease in shareholders funds and long-term liabilities.
Examples of such cashflows include:
- Proceeds on issue of shares
- Repayment of loans e.g. loan stock or debentures
- Capital repayment on finance lease
- Dividends paid
IAS 7 recommends that the cashflow statement can be prepared using two methods:-
- Direct method
- Indirect method