Cash flow statement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2011 Whether bad debts written off will be added back to the cash flow statement in indirect method.

In another case instesd of writing off bad debts, i made a provision of bad debts. now whether it will be added back.

Is there any difference between these two entries. please explain in detail.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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08 July 2011 Yes it has to be added. There is a difference only from the accounting point of view in 1st case it vanished from your books and in the 2nd case it is appearing in your Balance Sheet profit is reduced and shown as provisions.

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