Under IAS 7, statement of cash flows can be prepared under either direct method or indirect method. The terminology is somewhat confusing, since investing and financing sections of the statement of cash flows are exactly the same under both methods. They only differ in a way the operating cash flows are arrived at.
Under direct method, as the name suggests, the cash flows from operations are derived directly from the bank account, i.e. proceeds from sales, purchases of goods for resale, etc.
Under indirect method, the cash flows from operations are derived indirectly, starting from a measure of profit or loss (usually profit before tax), and adjusting it for the effects of:
(a) changes during the period in inventories and operating receivables and payables;
(b) non-cash items such as depreciation, provisions, deferred taxes, unrealized foreign currency gains and losses, and undistributed profits of associates; and
(c) all other items for which the cash effects are investing or financing cash flows.
Should revaluation of securities at FVPL be presented separately from net purchases (sales) of those securities in the operating section of the statement of cash flows prepared under indirect method under IFRS?