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Cash flow statement
where will we show insurance claim received on loss of fixed assets due to fire
Replies (11)
cash flows from investing activities
Income from Investing Activities
but in institute's book it's shown as extraordinary item under operating activities
If Insurance claim on Assets in fire then
If it is insurance then it is shownunder investment activities , insurance claims is shown under extraordinary items
Actually it's an extraordinary item, as loss of assets caused by fire won't be part of day to day business activity.
Hence it shall be treated as cash flows from operating activites.
Hence it shall be treated as cash flows from operating activites.
but even as an extraordinary item why is it coming under operating wouldn't investing be more appropriate
extra ordinary items
Go as per what AS 3 and ICAI says.
They are always correct.
As per my view both answers are correct.
But in exam only 1 answer accepted based what assumption you make.
Such assumption shall match with ICAI answer then only you will be rewarded marks. :)
They are always correct.
As per my view both answers are correct.
But in exam only 1 answer accepted based what assumption you make.
Such assumption shall match with ICAI answer then only you will be rewarded marks. :)
Insurance claims received against loss of stock or loss of profits are extraordinary
operating cash inflows for all enterprises.
Insurance claims received against loss of fixed assets are extraordinary investing
cash inflows for all enterprises.
These are the words from the study material.
operating cash inflows for all enterprises.
Insurance claims received against loss of fixed assets are extraordinary investing
cash inflows for all enterprises.
These are the words from the study material.
it's included in cash flow from operating activities
if you think it's neither investing nor financing such item shall be included in operating ..
if you think it's neither investing nor financing such item shall be included in operating ..
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