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In the case of other entities, money flows arising from interest paid ought to be categorized as money flows from financing actions whereas interest and dividends acquired should be categorised as cash flows from investing actions. Cash flows arising from interest paid and interest and dividends obtained in the case of a financial institution should be categorised as cash flows arising from operating activities. This amount is presented separately from cash flows from working, investing and financing activities and consists of the variations, if any, had these money flows been reported at finish of interval change rates. The separate disclosure of money flows arising from financing activities is necessary as a outcome of it is helpful in predicting claims on future cash flows by suppliers of capital to the entity. The amount of money flows arising from working actions is a key indicator of the extent to which the operations of the entity have generated enough cash flows to repay loans, keep the working capability of the entity, pay dividends and make new investments without recourse to external sources of financing.
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