statement of changes in financial position. accounting standard- 3 cash flow statement
TRANSCRIPT
Statement of Changes in Financial Position
ACCOUNTING STANDARD- 3
CASH FLOW STATEMENT
Statement of
Inflows
Outflows
Of Cash &
Cash Equivalents
CASH EQUIVALENTS
Short term highly liquid investments readily convertible subject to an insignificant risk of changes in value.
TYPES OF ACTIVITIES
OPERATING
INVESTING
FINANCING
OPERATING ACTIVITIES Principal revenue-producing
activities
of the enterprise
OPERATING ACTIVITIES Examples:
Cash receipts from sale of goods / rendering services;
Cash receipts from royalties, fees, commissions and other revenue;
Cash payments to suppliers of goods and service;
Cash payments to and on behalf of employees.
Operating ActivitiesIndirect Method
Net Income + Depreciation expense + Losses from sale of assets
- Gains from sale of assets - increases in current assets + decreases in current assets + increases in current liabilities - decreases in current liabilities = Net cash from operating activities
INVESTING ACTIVITIES Acquisition and disposal of long term
assets and other investments
Acquiring and disposal of debt and equity instruments other
Enterprise(s)
INVESTING ACTIVITIES
Examples :
Cash payments to acquire fixed assets
Cash receipts from disposal of fixed assets
Cash payments to acquire shares or debt instruments of
other enterprises
Cash receipt from disposal of above investments
FINANCING ACTIVITIES Result in changes in size and composition of
owners capital & borrowing
FINANCING ACTIVITIES
Examples:
Sale of share
Buy back of shares
Redemption of preference shares
Redemption of debentures
Repayment of Long term loan
Dividend / interest paid
NON CASH TRANSACTIONS Excluded from CFS
Disclosed in the financial statements.