CERTYNEX IFRS ACADEMY

Ostdane buys an office building for its headquarters, paying for it with a mortgage loan disbursed through its bank, and presents the payment for the building as a financing cash flow. What is the error?

The payment for the building is investing; only the loan proceeds are financing.

There is no error: an asset financed by borrowing follows the classification of the loan.

The payment for the building is operating, as the headquarters serves the business.

The mortgage loan should be presented as investing.