Question
Why are impairment losses added back when converting net income to CFO under the indirect method?
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Answer
They reduce net income but are non-cash charges.
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Question
A company reports interest paid in CFF. Which reporting standard allows this classification?
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Answer
IFRS.
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Question
Why is a gain on sale of assets subtracted when reconciling net income to CFO?
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Answer
It is non-operating and belongs in CFI.
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Question
How does the direct method present CFO differently from the indirect method?
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Answer
Direct shows actual operating cash receipts and payments.
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