CERTYNEX IFRS ACADEMY

To classify its cash flows, the controller of Tormira uses this rule: “only flows linked to income recognised in profit or loss are operating; any other flow is investing”. What is the error?

None: this is the definition of operating activities.

The definition is residual: operating is whatever is neither investing nor financing.

The residual category is financing.

Flows with no matching income in profit or loss must be excluded from the statement of cash flows.