The financing activities report the changes in the size and composition of the share/owner’s capital and debt of the enterprise. Their separate disclosure is useful in predicting claims on future cash flows by providers of funds (both capital and borrowings) to the enterprise. Examples of cash flows arising from financing activities arc as follows:
• Cash proceeds from issue of shares or other similar instruments.
• Cash proceeds from issue of debentures, loans, notes, bonds and other short-term or long term borrowings.
• Cash repayments of amount, borrowed.
• Buy-back of shares.
• Redemption of preference shares.
• Dividend/interest paid.