Treatment of debtors

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Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2012 My query is that what would be the treatment of debtors in a cash flow, if the debtors are settled by other than cash consideration.
In my case they are settled by issue of equity shares of the company.

Its effect would be
1st effect- operating activity - add the figure as there is decrease in trade receivable/debtors.

2nd effect- it can't come under financing activity as there is no issue of shares for cash.

Kindly help me to get out with the query.??

Thanks in anticipation

Amol S Joglekar

Amol S Joglekar (Expert)
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28 October 2012 Both will form the part of FUNDS flow.... debtors by way of "working capital" and "Investment" will get increased. Cash element is absent so no question of cash outgo or inflow.

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