Statement of Changes in Financial Position ACCOUNTING STANDARD

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 Activities Indirect 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.