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What is the treatment of provision for bad debts of profit and loss acc in cash flow from operations and why?
Replies (3)
provision for bad debts should be added to N/P because providing PFBADD is a non cash item and thus added to NP to reach operating profit.
Okay thanks
madam, refer old syllabus practice manual question no 7.
provsision for bad debts value should be consider under changes in working capital only.
provision for bad debts as per profit and loss account need not be add back to net profit to arrive operating profit before working capital changes.
do not get any confusion right now just follow ICAI material.
provsision for bad debts value should be consider under changes in working capital only.
provision for bad debts as per profit and loss account need not be add back to net profit to arrive operating profit before working capital changes.
do not get any confusion right now just follow ICAI material.
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