18 An entity shall report cash flows from operating activities using either:
(a) the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or
(b) the indirect method, whereby operating profit or loss is adjusted for:
(i) the effects of transactions of a non-cash nature;
(ii) any deferrals or accruals of past or future operating cash receipts or payments;
(iii) income or expenses classified in the operating category in the statement of profit or loss for which the associated cash flows are classified as cash flows from either investing or financing activities; and
(iv) cash flows from operating activities for which the associated income or expenses are not classified in the operating category of the statement of profit or loss.
19 Entities are encouraged to report cash flows from operating activities using the direct method. The direct method provides information which may be useful in estimating future cash flows and which is not available u
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