CERTYNEX IFRS ACADEMY

Calquine manufactures equipment that it rents out for three years and then sells in the ordinary course of business (IAS 16 para. 68A, context data). It presents manufacturing costs as investing and resale proceeds as investing. What is the error?

Only resale proceeds should have been presented as operating; manufacturing costs remain investing.

Payments to manufacture and resale proceeds of these assets are operating cash flows.

Rentals received should have been presented as financing.

There is no error: leased-out assets are fixed assets.