In accordance with IAS 7,what is the appropriate classification for the conversion of preference shares to ordinary shares?
A)inflow in investing activity
B)inflow in financing activity
C)non-cash investing item
D)non-cash financing item

Question

Quizplus · Accepted Answer

The conversion of preference shares to ordinary shares involves a change in the ownership structure of the company and affects equity. Therefore, it is a non-cash financing item, which is reported in the statement of cash flows under financing activities.

In Accordance with IAS 7,what Is the Appropriate Classification for the Conversion