Cash flow under AS & IndAS

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This discussion clarifies the treatment of non-current assets and liabilities within the context of working capital changes in cash flow statements. It addresses the common misconception that working capital solely comprises current items and explains how long-term provisions, like gratuity, are accounted for. The core difference between cash flow and fund flow statements regarding cash and non-cash items is also explored.

Helper

Helper (Querist)

29 April 2020 Dear Expert,
In movement in workingcapital,why we are including non current asset or liabilities.
Since working capital contains only current item.

Please explain

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

08 May 2020 Cash Flow statement only consists on Cash Items and on the other hand Fund Flow Statements take into account Non Cash Items.

Helper

Helper (Querist)

09 May 2020 In cash flow statement -Change in working capital (only current asset or current liability change should be consider) but what about long term provision (such as gratuity) its not financial item.
Does the same will be consider in changes in working capital

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