Cashflows from financing activities

Financing activities are those activities that will lead to either an increase or decrease in shareholders funds and long-term liabilities.

Examples of such cashflows include:

• Proceeds on issue of shares
• Repayment of loans e.g. loan stock or debentures
• Capital repayment on finance lease
• Dividends paid

IAS 7 recommends that the cashflow statement can be prepared using two methods:-

• Direct method
• Indirect method