Cash flow classification requires entities to separately report operating, investing and financing movements, with mandated disclosures for supplier finance arrangements.

Ind AS 7 requires every entity to present a statement of cash flows as part of its financial statements, classifying cash flows into operating, investing and financing activities. Operating cash flows may use the direct or indirect method. Major investing and financing cash receipts and payments are separately reported, subject to specified net-reporting exceptions. For non-financial entities, interest paid is financing, interest and dividends received are investing, and dividends paid are financing cash flows. Non-cash investing and financing transactions are excluded but separately disclosed, while financing-liability and supplier-finance arrangements require prescribed disclosures.

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