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Ind-AS 7: Cash Flow Statement (Other Points (Cash and Cash Equivalents…
Ind-AS 7: Cash Flow Statement
CF from Operating Activities
Direct Method
encouraged by Ind-AS
Cash sales, cash purchases etc.
Directly taking transactions from cash and bank account
Indirect Method
Using P/L
Starting with net profit and making adjustments
to it
Related with nature of business of entity
CF from Investing Activities
Related with fixed assets (tangible & intangible) & investments (short term & long term)
Changes in control in subsidiary
CF from Financing Activities
Related with share capital & loans
Changes in ownership interest in subsidiary
that does not result in loss of control
Other Points
Cash and Cash Equivalents
Cash balance
Bank balance
Investments expected to be
realised in 90 days
Bank OD repayable on demand
Other ODs will be under financing activities
Net Cash Flows
No reporting on net basis.
Only on gross basis
Exceptions
Receipts and payments that
reflect transactions of customer rather than entity's
Receipts and payments for which
turnover is quick, amts are large and maturities are short
Financial Institutions
Placing and withdrawing deposits in other financial institutions
Receipts & payments for acceptance of deposits with fixed maturity date
Cash Equivalents in Foreign Currency
Consider it at actual rate
(date of cash flow)
Eliminate exchange fluctuation booked
from net profit
CFS for Banking & NBFC
Interest on loans and deposits
to be considered in operating activities
Taxes
Normally classified under operating activities
Unless they can be otherwise identified to
generate cash flows that are investing/financing in nature
Tax on LTCG is under investing