One positive total, three stories
IAS 7 distinguishes operating, investing and financing activities. Operating relates to the main revenue-producing activity, investing to long-term assets and investments, and financing to equity and borrowings. Source: **curr-stat-ias7**, About, activity categories. The organisation’s nature matters; a payment label alone is insufficient.
Fictional cash bridge
A manufacturer receives 500 and pays suppliers and employees 420: operating cash flow 80. It sells equipment for 30 and buys equipment for 160: investing cash flow −130. It borrows 100 and repays 40: financing cash flow 60. Total change is 80 − 130 + 60 = 10; operations are 50 short of net investment payments.
Sales, interest and non-cash items
Equipment sold for 30 with carrying value 22 creates accounting profit 8 but cash of 30. A subsidiary acquisition or loss of control is investing activity in the IAS 7 overview. IFRS 18 is mandatory for annual periods beginning on or after January 1, 2027, with early application permitted; source **curr-stat-ifrs18**, About. IAS 7 excludes non-cash investing and financing transactions from the statement itself, with separate disclosure.
Reconcile and assess durability
Define cash and equivalents, reconcile opening cash, change and closing cash, and keep currency effects separate. An advance may improve current cash while creating future performance; collecting old receivables may not recur. Investing may maintain capacity, while asset sales may reduce it. Read financing as borrowing/repayment and contributions/distributions, retaining gross movements beside net totals. See [cash-flow statement](/guides/cash-flow-statement/) and [profit versus cash](/guides/profit-vs-cash/).