statement of changes in financial position. accounting standard- 3 cash flow statement

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.