18An entity shall report cash flows from operating activities using either:

18 An entity shall report cash flows from operating activities using either:
(a) the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or
(b) the indirect method, whereby operating profit or loss is adjusted for:
(i) the effects of transactions of a non‑cash nature;,
(ii) any deferrals or accruals of past or future operating cash receipts or payments;,
(iii) income or expenses classified in the operating category in the statement of profit or loss for which the associated cash flows are classified as cash flows from either investing or financing activities; and
(iv) cash flows from operating activities for which the associated income or expenses are not classified in the operating category of the statement of profit or lossand items of income or expense associated with investing or financing cash flows.
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20 Under the indirect method, the net cash flow from operating activities is determined by adjusting operating profit or loss for the effects of:
(a) changes during the period in inventories and operating receivables and payables;
(b) non‑cash items such as depreciation, provisions and, deferred taxes, unrealised foreign currency gains and losses classified in the operating category, and undistributed profits of associates; and
(c) income or expenses classified in the operating category in the statement of profit or loss all other items for which the cash effects are investing or financing cash flows; and.
(d) operating cash flows, such as income tax (in accordance with paragraph 35), for which the corresponding income or expenses are not classified in the operating category in the statement of profit or loss.
Alternatively, the net cash flow from operating activities may be presented under the indirect method by showing the revenues and expenses classified in the operating category in the statement of profit or loss, disclosed in the statement of comprehensive income and the changes during the period in inventories and operating receivables and payables and any other operating cash flows for which the corresponding income or expenses are not classified in the operating category.
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Interest and dividends

31 Cash flows from interest and dividends received and paid shall each be presented disclosed separately. Each shall be classified in a consistent manner from period to period applying paragraphs 32, 33A and 34A–34Das either operating, investing or financing activities.
32 The total amount of interest paid during a period is included disclosed in the statement of cash flows whether it has been recognised as an expense in profit or loss or capitalised in accordance with AASB 123 Borrowing Costs.
33 \[Deleted\]Interest paid and interest and dividends received are usually classified as operating cash flows for a financial institution. However, there is no consensus on the classification of these cash flows for other entities. Interest paid and interest and dividends received may be classified as operating cash flows because they enter into the determination of profit or loss. Alternatively, interest paid and interest and dividends received may be classified as financing cash flows and investing cash flows respectively, because they are costs of obtaining financial resources or returns on investments.