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Nozmul Hussain ID: 2489340 Unit Leader: Libby Scott Unit: MAC-312, MAC-3-303/4, Financial Reporting Applications Course: BAAF Year: 3, semester 1 Word count 3979 Part 1 a) According to IAS 7 net cash flow from operating activities can be calculated using either of two methods; direct method and indirect method. The direct method shows operating cash receipts and operating cash payments; including cash receipts from customers, cash payments to and on behalf of employees, cash payments to suppliers; all resulting in the 'net cash flow from operating activities'. The indirect method begins with profit before tax and adjusts for non-cash charges and credits such as depreciation and for the movement in working capital items. In simpler terms, the direct method looks at all actual cash transactions, while with the indirect method you look at the balance sheet items in relation to the previous year to find the cash inflow and outflows from operating activities while adjusting for non-cash charges and...

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