Cash Flow by Private Company


Is it mandatory for a private limited company to prepare a cash flow statement?

knowledge seeker

The enterprises which fall in any one or more of the following categories, at
any time during the accounting period:
(i) Enterprises whose equity or debt securities are listed whether in
India or outside India.

(ii) Enterprises which are in the process of listing their equity or
debt securities as evidenced by the board of directors’ resolution
in this regard.
(iii) Banks including co-operative banks.
(iv) Financial institutions.
(v) Enterprises carrying on insurance business.
(vi) All commercial, industrial and business reporting enterprises,
whose turnover for the immediately preceding accounting period
on the basis of audited financial statements exceeds Rs. 50 crore.
Turnover does not include ‘other income’.
(vii) All commercial, industrial and business reporting enterprises
having borrowings, including public deposits, in excess of Rs.
10 crore at any time during the accounting period.
(viii)Holding and subsidiary enterprises of any one of the above at
any time during the accounting period.
The enterprises which do not fall in any of the above categories are
encouraged, but are not required, to apply this Standard.





Madhusudan Kabra

Practicing CA

hi shruti,


AS-3 requires that if an entity prepares Cash Flow Statement then it requires to follow AS-3

AS-3 does not mandate any entity to prepare cash flow statement it just says that if you prepare then you have to follow AS-3

as far as company's law is concern it also not require a company to prepare cash flow statement.


So in nutshell a private limited company DOES NOT require to prepare cash flow statement


hope its useful for you


Thanx to u both.


But is a subsidiary private company required to prepare cash flow?

If its holding company is having turnover above 50 Cr INR.



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