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It additionally provides insights into an entity’s liquidity, solvency, and skill to generate cash flows. As per IND AS 7, the aim of cash circulate statements is to supply information about an entity’s cash inflows and outflows throughout a given period. Significant restricted balances inside “cash and cash equivalents”, such as margin money or pledged deposits, must be disclosed individually along with management commentary explaining their nature and cause for restriction per Para forty eight. Curiosity paid/received and dividends received/paid should be disclosed separately per Para 31, with constant classification throughout intervals. Classification relies upon strictly on the underlying activity’s nature, working (core business), investing (long-term assets), or financing (equity/debt funding), not merely on asset/liability movement.