Classification of cash flow statement:
According to Iranian Standard No. 2, the cash flow statement is as follows:
1- Operational activities
2- Return on investments and interest paid for financing
3- Income tax
4- Investment activities
5- Financing activities
The difference between international standards and Iranian standards in connection with the statement of cash flows, the separation of investment returns and interest paid for financing and income tax as separate parts in the statement of cash flows, which causes the statement of cash flows from 5 but according to international standards, it consists of 3 parts.
operational activities
It is the main and continuous activities that generate operational income of the business unit. These activities represent the production and sale of goods and the provision of services, and the costs and revenues related to it are shown in the determination of operating profit and loss in the profit and loss statement. Cash flows related to this type of activity are:
A) Incoming cash flows include:
1) Cash receipts from selling goods and providing services
2) Receipts from royalties, fees and other operating incomes
b) Outgoing cash flows include:
1) Cash paid to sellers of goods and services
2) Cash payments to employees for severance benefits or loans
3) Cash paid for operating expenses
4) Cash paid for insurance premiums, damages and pensions
Investment return and interest paid for financing
Including receipts from the ownership of investments and interest received from short-term and long-term bank investment deposits, as well as payments made to suppliers of financial resources, the cash flows related to this type of activity include:
A) Incoming cash flows include:
1) Interest and fees received
2) Received dividends
b) Outgoing cash flows include:
1) Paid interest and fees
2) Paid dividends
3) Payment installments related to the lease contract under the condition of possession
income tax
Cash flows related to income tax are only limited to payments or accounts payable due to income tax or refund of the amounts paid in this regard (the meaning of tax is income tax in Article 105 of direct taxes).
Taxes such as the duty of Article 104 of the Direct Taxes Law (3%), value added tax (5%) are all considered as part of operational activities and not part of income tax.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Link to the audit accounting clinic
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