ACCOUNTING STANDARD-3 CASH FLOW STATAEMENTS
PURPOSE <ul><li>To provide  information about the historical changes in cash and cash equivalents of an enterprise by mean...
SCOPE <ul><li>An enterprise should prepare a cash flow statement and present the same along with the financial statements ...
RELEVANT DEFINITIONS <ul><li>Cash  comprises cash on hand and demand deposits with banks. </li></ul><ul><li>Cash equivalen...
RELEVANT DEFINITIONS <ul><li>Operating activities  are the principal revenue-producing activities of the enterprise.  </li...
PRESENTATION OF THE CASH FLOW STATEMENT <ul><li>The cash flow statement should report cash flows during the period.  </li>...
CASH FLOW FROM OPERATING  ACTIVITIES <ul><li>EXAMPLES: </li></ul><ul><li>Cash receipts from customers, royalties, fees, co...
CASH FLOW FROM INVESTING ACTIVITIES <ul><li>EXAMPLES: </li></ul><ul><li>cash payments to acquire fixed assets. </li></ul><...
CASH FLOW FROM FINANCING ACTIVITIES <ul><li>Proceeds from issue of share capital. </li></ul><ul><li>Proceeds from long ter...
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As 03

  1. 1. ACCOUNTING STANDARD-3 CASH FLOW STATAEMENTS
  2. 2. PURPOSE <ul><li>To provide information about the historical changes in cash and cash equivalents of an enterprise by means of a cash flow statement. </li></ul><ul><li>Classification of cash flows into operating, investing and financing activities. </li></ul>
  3. 3. SCOPE <ul><li>An enterprise should prepare a cash flow statement and present the same along with the financial statements for each period . </li></ul>
  4. 4. RELEVANT DEFINITIONS <ul><li>Cash comprises cash on hand and demand deposits with banks. </li></ul><ul><li>Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash . </li></ul><ul><li>Cash flows are inflows and outflows of cash and cash equivalents. </li></ul>
  5. 5. RELEVANT DEFINITIONS <ul><li>Operating activities are the principal revenue-producing activities of the enterprise. </li></ul><ul><li>Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. </li></ul><ul><li>Financing activities are activities that result in changes in the size and composition of the owner’s capital (including preference share capital in the case of a company) and borrowings of the enterprise. </li></ul>
  6. 6. PRESENTATION OF THE CASH FLOW STATEMENT <ul><li>The cash flow statement should report cash flows during the period. </li></ul><ul><li>The cash flows have to be classified activity-wise into operating, investing and financing activities. </li></ul>
  7. 7. CASH FLOW FROM OPERATING ACTIVITIES <ul><li>EXAMPLES: </li></ul><ul><li>Cash receipts from customers, royalties, fees, commission, and other revenue. </li></ul><ul><li>Cash payments to suppliers for goods and services. </li></ul><ul><li>Cash payments to and on behalf of employees. </li></ul>
  8. 8. CASH FLOW FROM INVESTING ACTIVITIES <ul><li>EXAMPLES: </li></ul><ul><li>cash payments to acquire fixed assets. </li></ul><ul><li>cash receipts from disposal of fixed assets </li></ul><ul><li>Interest & dividend received </li></ul>
  9. 9. CASH FLOW FROM FINANCING ACTIVITIES <ul><li>Proceeds from issue of share capital. </li></ul><ul><li>Proceeds from long term borrowings. </li></ul><ul><li>Repayment of long term borrowings. </li></ul>

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