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Cash flow

taha123 (ca) (75 Points)

10 November 2015

does dividend comes in operating activity

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13 Replies

sdgunjal (student) (32 Points)
Replied 10 November 2015

No. It comes in financing activities

Rahul Mishra (studying) (34 Points)
Replied 10 November 2015

dividend paid is part of financing activity not of operating activity

Gagan Deep Singh (CHARTERED ACCOUNTANT) (1190 Points)
Replied 10 November 2015

Dividend recieved on investment in shares comes under investing activity and dividend paid on issue of shares comes under financing activity.

shabab anwer (Student CA IPC / IPCC) (25 Points)
Replied 10 November 2015

As per AS 3 CASH FLOW STATEMENT.UNDER INDIRECT METHOD: (i) DIVIDEND INCOME- add in investing activity. (ii) DIVIDEND PAID- less in financing activity and if there was any dividend proposed during the year add it in operating activity in net profit as adjustment or altenatevly u can make profit and loss appropriation account. UNDER DIRECT METHOD (i) DIVIDEND INCOME- add in investing activity. (ii) DIVIDEND PAID- less in financing activity

sonamtseringsherpa (abc) (33 Points)
Replied 10 November 2015

Dividend recieved is an investment activity , whereas dividend paid is financing activity.

Anmol Agrawal (Student) (12 Points)
Replied 10 November 2015

For a financing company dividend will come under operating activites

Deepak (to be a chartered accountant) (141 Points)
Replied 11 November 2015

No if we go with net profit we have to add back dividend provision in oprerating activities and thend deduct in financing activities

taha123 (ca) (75 Points)
Replied 11 November 2015

if provision is not made will it then come under operating??

(Guest)

It is cash flow buddy...provision is irrelevant...see the actual cash flow

shabab anwer (Student CA IPC / IPCC) (25 Points)
Replied 11 November 2015

Under indirect method we have to calculate operating profit before working capital changes so we adjust operting incomes nd expenditure in net profit to obtain such profit.. So if there is any provision then we have to add it back.