alleryStart learning →How is depreciation treated in the cash flow statement?
ADeducted as a cash outflow
BShown as financing inflow
CAdded back as non-cash expense
DShown as investing outflow
Answer & Solution
Correct answer: C. Added back as non-cash expense
Depreciation needs no current cash outlay, so it is added back to reconcile net income with operating cash flow.
Keep practising Ind AS 2 Inventories and Ind AS 16 Property, Plant and Equipment
Browse all Ind AS 2 Inventories and Ind AS 16 Property, Plant and Equipment questions for CA Final, or explore more Financialreporting topics.
Related questions
How do fixed assets differ from inventory in holding purpose?Why can depreciation on historical cost alone lead to excessive dividends when prices riseIn the appraisal method, who determines fair market value?In indexation, what is applied to the cost of assets?Why might fixed assets be revalued?Which terms apply to natural resources and intangibles respectively?Which event may indicate that an asset is impaired?Which is one of the four inputs used to compute depreciation?