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cash flow statement
what is the treatment of preliminary expenses in CFS.
Replies (2)
i think it will be shown as an outflow under head " financing activities".... as it is no way, related with operating flows as per prevelent theory i.e., operating outflows can be linked, on one to one basis with operating inflows or revenues. Since there is no such matching lies in case preliminary exp. they ought to be shown in "financing activities". But i do agree with the fact that such expanses dont contribute towards the capital. I think we should come with an unanimous answer to this question.
it should be added back in operating activities while doing adjustment of non cash and non operating activities to arrive at operating profit before working capital changes
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