C. Both the direct and indirect formats of cash flow statements are allowed under IFRS and U.S. GAAP, but indirect is encouraged under IFRS only. This was a false answer for one of the multiple choices questions I saw. Does anyone know what would make this statement correct?
both recommend it not just ifrs
Both direct and indirect are permitted by IFRS and US GAAP but the use of the direct method is encouraged by both. In reality, US firms tend to report indirect format.