Beruflich Dokumente
Kultur Dokumente
Learning Objectives
1. Concept of Cash Flow statement
(as per Revised AS 3)
2. Format of Cash Flow Statement
3. Preparation and Presentation of
Cash Flow Statement
1
2
3
10
Cash payment
to acquire
fixed assets
including
intangibles
Cash receipts
from disposal
of fixed assets
Cash payment
to acquire
shares, debt
instruments of
other
companies,
etc
Cash receipts
form disposal
of shares,
debentures,
etc
11
12
13
Foreign
Currency
Cash Flows
Extraordinary
items
14
Financial
enterprises
15
Other
Enterprises
16
Dividends Paid
In all
cases
Dividend Paid
Cash flow from
Financing activities
17
Taxes on
Income
Should be separately
disclosed under Operating
activities unless identified,
otherwise
Acquisition and
disposition of
subsidiaries
and other
business units
Should be separately
disclosed under Investing
activities
18
Non-cash
transactions
19
20
21
22
Financial Statements
23
Direct Method
Indirect Method
24
25
26
27
28
29
30
Practical Illustrations
Example 1: Direct Method
31
31.03.2010 31.03.2011
Rsin000
Rsin000
360
444
151.8
163.8
240
234
24
48
12
13.2
120
132
907.8
Assets
Land
Buildings&Equipments
Cash
Receivables
Inventories
Advances
1035
907.8
ProfitandLossAccountfortheyearended31Mar2011
Rsin000
NetSales
2520
Less:COGS
1980
Depreciation
60
Salariesandwages
240
Operatingexpenses
80
Provisionfortax
88
2448
GrossProfit
72
Profitonsalesofequipment(Cost:72)
Dividend
RetainedEarnings
31.03.2010 31.03.2011
Rsin000
Rsin000
48
96
360
576
60
72
168
186
264
96
7.8
9
12
84
72
12
1035
32
Cash
Receipts
from
Customers
Cash
Payments
to
Suppliers
and
Employee
s
Income
Tax Paid
Investment
in purchase
of Building
and
Equipments
Receipts
from Sales of
Equipments
(for this
purpose we
need to know
the
Accumulated
Depreciation
of Equipment
sold)
33
(Rs.In000)
2520
168
2688
186
2502
34
(Rs.In000)
1980
240
80
2300
240
24
96
9
Less:
ClosingAccountsPayable
234
ClosingOutstandingExpenses
OpeningInventories
OpeningAdvances
48
264
7.8
369
2669
553.8
2115.2
35
(Rs.In000)
IncomeTaxesPaid
ProvisionforTaxduringtheyear
88
Add:OpeningIncomeTaxpayable
12
100
Less:ClosingIncomeTaxpayable
13.2
86.8
36
(Rs.In000)
PurchaseofBuildingsandEquipments
OpeningBalanceofBuildingandEquipments
Less:CostofsoldEquipment
360
72
288
ClosingBalanceofBuildingandEquipments
576
PurchaseofBuildingandEquipments
288
37
WorkingNote:5
(Rs.In000)
AccumulatedDepreciationonEquipmentssold
AccumulatedDepreciation Opening
Add:Depreciationduringtheyear
120
60
180
Less:AccumulatedDepreciation Closing
132
48
38
WorkingNote:6
(Rs.In000)
CashReceiptsfromSaleofEquipments
CostofsoldEquipment
72
AccumulatedDepreciationonEquipmentssold
48
WrittenDownValueofEquipmentsold
24
Add:Profitonsales
12
36
39
2502
2115.2
386.8
86.8
300
40
(Rs.In000)
CashflowsfromInvestingactivities:
PurchaseofLand
PurchaseofBuildingandEquipment
48
288
336
CashreceivedonsaleofEquipment
NetCashfromInvestingactivities
36
(300)
41
(Rs.In000)
CashflowsfromFinancingactivities:
IssueofShares
84
DividendPaid
72
NetCashfromFinancingactivities
12
NetincreaseinCashandCashequivalents
12
CashandCashequivalentsatthebeginning
60
CashandCashequivalentsattheend
72
42
Practical Illustrations
Example 2: Indirect Method
43
31.03.2010 31.03.2011
Rsin000
Rsin000
360
444
151.8
163.8
240
234
24
48
12
13.2
120
132
907.8
Assets
Land
Buildings&Equipments
Cash
Receivables
Inventories
Advances
1035
907.8
ProfitandLossAccountfortheyearended31Mar2011
Rsin000
NetSales
2520
Less:COGS
1980
Depreciation
60
Salariesandwages
240
Operatingexpenses
80
Provisionfortax
88
2448
GrossProfit
72
Profitonsalesofequipment(Cost:72)
Dividend
RetainedEarnings
31.03.2010 31.03.2011
Rsin000
Rsin000
48
96
360
576
60
72
168
186
264
96
7.8
9
12
84
72
12
1035
44
Investment in purchase
of Building and
Equipments
Receipts from
Sales of
Equipments (for
this purpose we
need to know
the Accumulated
Depreciation of
Equipment sold)
45
(Rs.In000)
IncomeTaxesPaid
ProvisionforTaxduringtheyear
88
Add:OpeningIncomeTaxpayable
12
100
Less:ClosingIncomeTaxpayable
13.2
86.8
46
(Rs.In000)
PurchaseofBuildingsandEquipments
OpeningBalanceofBuildingandEquipments
Less:CostofsoldEquipment
360
72
288
ClosingBalanceofBuildingandEquipments
576
PurchaseofBuildingandEquipments
288
47
WorkingNote:3
(Rs.In000)
AccumulatedDepreciationonEquipmentssold
AccumulatedDepreciation Opening
Add:Depreciationduringtheyear
120
60
180
Less:AccumulatedDepreciation Closing
132
48
48
WorkingNote:4
(Rs.In000)
CashReceiptsfromSaleofEquipments
CostofsoldEquipment
72
AccumulatedDepreciationonEquipmentssold
48
WrittenDownValueofEquipmentsold
24
Add:Profitonsales
12
36
49
72
88
160
Adjustmentsfor:
Depreciation
Operatingprofitbeforeworkingcapitalchanges
AdjustmentsforWorkingCapitalChanges:
Add:DecreaseinInventories
Less:IncreaseinReceivables
Less:IncreaseinAdvances
Less:DecreaseinAccountsPayable
Add:IncreaseinOutstandingexpenses
60
220
168
(18)
(1.2)
(6)
24
CashGenerationfromOperations
166.8
386.8
Less:IncomeTaxPaid
NetCashfromOperatingactivities
86.8
300
50
(Rs.In000)
CashflowsfromInvestingactivities:
PurchaseofLand
PurchaseofBuildingandEquipment
48
288
336
CashreceivedonsaleofEquipment
NetCashfromInvestingactivities
36
(300)
51
(Rs.In000)
CashflowsfromFinancingactivities:
IssueofShares
84
DividendPaid
72
NetCashfromFinancingactivities
12
NetincreaseinCashandCashequivalents
12
CashandCashequivalentsatthebeginning
60
CashandCashequivalentsattheend
72
52
Lesson Summary
We have learnt important terms used in Cash Flow Statement Cash, Cash Equivalents and Cash Flow Statement
Cash Flow Classification - Cash Flow from Operating, Investing
and Financing Activities
53
Thank You