Cor pora te rep or ti n g

 (1 
mark)
Many users will not understand the indirect method and the complex adjustments 
which are made. 
(1 mark) 
The adjustments made to profit in the indirect method may make it easier for the 
preparers of the statement of cash flow to allow bias to affect whether cash flows 
are reported within operating activities or elsewhere.
 (1 
mark) 
 
(Part b: 9 marks max) 
(c)
Beth and Banger are related parties because the companies are under common 
control.
(1 mark)
The relationship between Beth and Banger must be disclosed in the financial 
statements, as well as any transactions and outstanding balances. 
(1 mark)
Beth would not be allowed to disclose that the transactions are at terms equivalent 
to those in an arm’s length transaction.