Question
How is the profit or loss due to exchange of cash presented in the form of cash flow?
Answer:
According to Paragraph 47 of Accounting Standard No. 2:
Whenever the profit or loss resulting from the exchange of settled transactions is included in the profit and loss of the period and this profit or loss is of an operational nature, in case of using the indirect method to calculate the net cash flow from operating activities, another adjustment in the operating profit It will not be necessary, in a similar way, when the profit or loss resulting from the translation of unsettled operational balances is referred to profit and loss, the procedure will be as above, because for example, the increase of accounts receivable in the form of turnover of these accounts, in profit adjustments operational, and this increase, which includes the profit or loss resulting from the revaluation of accounts receivable balances, neutralizes the amounts allocated to the profit and loss due to this revaluation. In the case of using the indirect method to calculate the net cash flow from operating activities, in the following cases it is necessary to adjust the operating profit due to the profit or loss resulting from the exchange rate of settled transactions and unsettled balances:
A. When a part of the profit or loss resulting from the exchange rate of the settled operational transactions and the unsettled operational balances is not included in the profit and loss of the period according to the accounting standards or mandatory laws.
B. Whenever the profit or loss resulting from the exchange of non-operational transactions settled or unsettled non-operational balances is included in the calculation of the period’s operating profit.
C. Whenever the profit or loss resulting from the exchange of cash is included in the calculation of the operational profit or loss of the period.
It should be noted that in cases A and B, the adjustments made in the calculation of cash flows are meant in the relevant main headings. In relation to paragraph C, the adjustments made as one of the adjustment factors between the balance of the first period and the end of the cash period are presented in the cash flow statement.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
The group of accountants and auditors of Tabriz
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