Economics · Financial Statements Analysis

Consider the following statements regarding accounting statements: Statement 1: The direct method of calculating operating cash flows is preferred by the IASB, yet most Indian banks continue to use the indirect method for regulatory reporting. Statement 2: A transaction involving the acquisition of assets by assuming directly related liabilities (e.g., a finance lease) should be excluded from the cash flow statement. Statement 3: In a fund flow statement, 'Total Sources' equals 'Total Applications' only after the net change in working capital is included. Statement 4: If a company redeems preference shares at a premium, the premium paid should be adjusted against operating activities as a non-cash charge. Statement 5: For a diversified conglomerate, the interest paid on a loan taken specifically to fund the construction of a new factory must be classified as an investing activity under Ind AS 7. Which of the following is correct?