ICANFinancial AccountingStatement of Cash Flows2022

Under IAS 7 Statement of Cash Flows, which of the following transactions would be classified as a FINANCING activity for a non-financial entity?

APayment of dividends received from an equity-accounted associate
BProceeds from the issuance of ordinary shares at a premiumCORRECT
CPurchase of treasury bills held for short-term investment purposes
DPayment of interest on a loan used to construct a qualifying asset
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Why the answer is B, and why the others tempt you.
IAS 7 paragraph 17 classifies proceeds from issuing shares (including share premium) as financing activities because they relate to changes in the size and composition of equity. Dividends received may be classified as operating or investing; purchase of treasury bills is an investing activity; and interest paid may be classified as operating or financing, but the key point is that share issuance proceeds are unambiguously financing.
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