IFRS Case 21-8 Statement of cash flows presentation, British Telecommunica-tions LO21-3 through LO21-6, LO21-9 IFRS Real World Financials a U.K. company, is the world's oldest communications company. The company prepares its financial statements in accordance with International Financial Reporting Standards. Locate BT's statement of cash flows from its website at Required: 1. What are the primary classifications into which BT's cash inflows and cash outflows are separated? 2. How are cash inflows from dividends and interest and cash outflows for dividends and interest classified in BT's cash flow statements? Notes 2022 2021 Em Em Cash flow from operating activities Profit before taxation Share of post tax (profit) loss of associates and joint ventures 1,963 1,804 (8) Net finance expense 922 791 Operating profit 2,885 2,587 Other non-cash charges 76 267 (Profit) loss on disposal of businesses (37) (65) (Profit) loss on disposal of property, plant and equipment and intangible assets (66) Depreciation and amortisation 4,405 4,347 (Increase) decrease in inventories (3) 2 (Increase) decrease in programme rights (17) 13 (Increase) decrease in trade and other receivables (53) 327 (Increase) decrease in contract assets (51) (141) Increase (decrease) in trade and other payables 99 (43) (Decrease) increase in contract liabilities (Decrease) increase in other liabilities (Decrease) increase in provisions Cash generated from operations Income taxes paid Net cash inflow from operating activities Cash flow from investing activities Interest received Dividends received from associates and joint ventures (93) (48) (1,169) (927) (80) (2) 5,962 6,251 (52) (288) 5,910 5,963 6 6 5 Acquisition of subsidiaries (7) Proceeds on disposal of subsidiaries, associates and joint ventures 76 164 Proceeds on disposal of current financial assets 13,402 13,506 Purchases of current financial assets (12,432) (12,085) Net (purchase) disposal of non-current asset investments (8) (11) Proceeds on disposal of property, plant and equipment and intangible assets 2 85 Purchases of property, plant and equipment and intangible assets (4,607) (4,903) Net cash outflow from investing activities (3,560) (3,240) Cash flow from financing activities Equity dividends paid Interest paid Repayment of borrowings (228) (2) (755) (770) (1,374) (1,162) 744 Cash generated from operations Income taxes paid Net cash inflow from operating activities Cash flow from investing activities Interest received Dividends received from associates and joint ventures 5,962 6,251 (52) (288) 5,910 5,963 6 6 Acquisition of subsidiaries 1 5 Proceeds on disposal of subsidiaries, associates and joint ventures (7) 76 Proceeds on disposal of current financial assets" 164 Purchases of current financial assets 13,402 13,506 Net (purchase) disposal of non-current asset investments (12,432) (12,085) (8) Purchases of property, plant and equipment and intangible assets Proceeds on disposal of property, plant and equipment and intangible assets (11) 21 85 (4,607) (4,903) Net cash outflow from investing activities (3,560) (3,240) Cash flow from financing activities Equity dividends paid Interest paid Repayment of borrowings" Proceeds from bank loans and bonds Payment of lease liabilities Cash flows from collateral received Changes in ownership interests in subsidiaries" Proceeds from issue of own shares Repurchase of ordinary share capital Net cash outflow from financing activities Net decrease in cash and cash equivalents Opening cash and cash equivalents' Net decrease in cash and cash equivalents Effect of exchange rate changes (228) (2) (755) (770) (1,374) (1,162) 744 (659) (782) (29) (490) (86) 13 1 (184) (14) (2,558) (3,219) (208) (496) 896 1,409 (208) (496) 4 (17) 25 692 896 Closing cash and cash equivalents' a Includes pension deficit payments of 1,121m (FY21: 955m). b Primarily consists of investment in and redemption of amounts held in liquidity funds. c Consists of additions to property, plant and equipment, engineering stores and software of 4,807m (FY21:E4,197m) and movements in capital accruals of 23m (FY21: E4m) less net refund in respect of spectrum acquisition of 223m (FY21: 702m prepayment). d Repayment of borrowings includes the impact of hedging. e Relates to the acquisition of the remaining 30% of the share capital of BT OnePhone Limited. As part of the accounting for the acquisition, we revisited our original assessment of control under IFRS 10 and concluded that it should have been classified as a subsidiary instead of a joint venture. The current period accounting reflects this assessment