cash flow statement

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Hi Everyone...

I ve a doubt regarding the treatment of "Drawings" in the cash flow statement, under Direct and Indirect method.

PLZ  HELP

Replies (6)

i think  DRAWING  should be treated as financing activity  and should be deducted as outflow in both direct and indirect method

 

i also think so but not sure.............

FIRSTLLY CASH FLOW PREPARTION IS MANDATORY FOR CORPORATES AND DRAWINGS NOT OCCURE IN THAT CASE.... BUT IN THE CASE OF INDIVIDUAL B/S DRAWINGS OCCURE.HENCE CONCEPTUALLY  I THINK IT SHOULD BE TREATED AS FINANCING ACTIVITY ( IF IT IS HAPPEN NOT REGULARLLY). BUT IT OCCURING REGULARLLY THEN IT SHOULD B TREATED AS OPERATING ACTIVITIES

Lokesh,

as per logic, drawings cannot be treated as operating because it is the amount that the proprietor withdraws throughout the year. It is as good as his remuneration. As he is the provider of Capital (When no loan has be taken) it shall be a financing activity.

 

Regards

Please support me  for Direct Method Cash Flow statement  format, its on daily basis. 

Please support me  for Direct Method Cash Flow statement  format, its on daily basis. 


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