Accounting Standard-Query

A. Taxes paid are never considered as "EXTRA-ORDINARY ITEM"...

B. Its just the way of presentation that CF from WC/OPERATING ACTIVITIES before tax and after tax..

C. And as interest or dividend is alwz received post-tax, the same will be shown on its net income in Investing activities..

D. And if there is any operating income or any other income, other than that mentioned in (c) above, will be received net of tax so will be shown at its net figure only. Reason is u receive the cash equivalent to net income and not gross income.. So u r not eligible to deduct tax that has been deducted at source,...

But, this is just my logical way to consider the AS and TDS concept, let others reply too

Completely Aagree with Dhiraj

You need not to make Any special adjustment for TDS.

Take a Example

Interest income Rs. 10000, Received Rs. 9000 and TDs deducted Rs. 1000

Make following adjustments

1.  Less. Rs.  10000 from P/L balance  (being  non- operative income credited to P/L)

2. Add: Rs. 9000 to Cash from investing activity (bring cash flow from  interest) .

You need NOT to make any adjustment for TDS, it get adjusted itself.

WHERE DID YOU SHOWS FOREIGN EXCHANGE FLUCTUATION LOSS OR PROFIT  IN STATEMENT OF INCOME AND RECEIPT OR PROFIT & LOSS ACCOUNT?

@ pravin

Foreign Exchange Fluctuation Profit or Loss is shown in Profit n Loss Account subject to its is under Integral Foreign Operation otherwise it is shown as Foreign Exchange Fluctuation Reserve in Liablity Side ..... U can Refer AS-11 for proper knowledge

Pravin ur Question itself is contradictory...

A. INCOME OF STATEMENT AND RECEIPT is prepared when books prepared as per CASH BASIS.

While at PROFIT AND LOSS account is prepared under MERCANTILE SYSTEM.

B. Foreign Exchange Fluctuation Profit/Loss in case of P&L is shown as per treatment, that means, if its loss then on debit side and vice-versa.

C. Foreign Exchange Fluctuation Profit/Loss, i consider, is not needed to be shown in STATEMENT OF RECEIPT AND PAYMENT A/C.

• In case of such loss/profit actually being spent or earned. In transactions with foreign countries a person either buys/pays the amount. Both the things are recoreded in statement, and hence here such loss/gain on foreign exchange fluctuation sets off on itself.
• While, in case of revaluation or closing the books and thus valuing assets in case of integrated/non-integrated branches, such non-cash profits/losses cannot be shown in statement as they are neither actually realised or paid. [Best example overhere is DEPRECIATION, which is a non-cash exps and so not shown in STATMENT].

Hope it solves ur query

depriciation

Interest income Rs. 10000, Received Rs. 9000 and TDs deducted Rs. 1000

Make following adjustments

1.  Less. Rs.  10000 from P/L balance  (being  non- operative income credited to P/L)

2. Add: Rs. 9000 to Cash from investing activity (bring cash flow from  interest) .

You need NOT to make any adjustment for TDS, it get adjusted itself.

1.   As per As-3 taxes paid / or received(refund)should not be considered as extra ordinary item(s).

2.  They should be classified as operating activity unless they can be specifically identified with   investing or financing activity.

3.  In cashflow statement we  record movements of cash and cash equivalents. If we receive interest or dividend income we should show the net income (after adjusting with TDS) and not the gross income. therefore question of showing TDS does not arise.

4.If we deduct tax at source for interest and dividend which we are paying should be classifed as investing ,financing activity respectively.(refer point 2 above).[ the deducted tax amount we are finally paying to concerned authorities. and hence in this entries are to be recorded for gross and for net amount]

5. Payment of taxes and refund of taxes happens in normal course of business and hence these are not extraordinary items.

for how much marks do Accounting Standards comes in PCC exams??????????