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Why is Separate Disclosure of Cash Flows from Investing Activities Important? State. - Accountancy

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Why is separate disclosure of cash flows from investing activities important? State.

Why is separate disclosure of cash flow from investing activities important while preparing Cash Flow Statement?

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Solution 1

The cash outflows due to investing activities are huge and used to acquire long-term assets. If not disclosed in a separate manner it will signal a wrong position of cash and cash equivalents.

Solution 2

The separate disclosure of cash flow from investing activities is important as it helps to show the
inflows and outflows of long-term investments and fixed assets.

Concept: Concept of Cash Flow Statement
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