S1: In a cash flow statement under Ind AS 7, taxes on income are generally classified as cash flows from operating activities. S2: However, if it is practicable to identify the tax cash flow with an investing or financing activity, it must be classified accordingly. Which statement(s) is/are correct?
Explanation:
Both statements are correct as per Ind AS 7. Taxes on income are generally operating, but if they can be specifically identified with a financing or investing transaction (like tax on sale of an asset), they should be classified with that activity.
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