lakshay (ipcc) (581 Points)
12 October 2011
1) pref share cap was redeemed at premuim of 10% partly out of proceeds issue of 10000 equity shares of rs 10 each issued at 10% premuim and partly out of profits otherwise available for dividends?
2) foregn exchange loss of 1600 represents loss in value of short term investemnt?
pls tell me the treatment of these 2 adjs. in CASH FLOW..they have already cme in may 2011 exmamination.....
pavan kumar
(CA Final , CMA Final)
(202 Points)
Replied 13 October 2011
1. do not have a direct impact on current cash flows its a non cash transaction - should not be considered for the purpose of CFS
2. has to be considered in cash flowsfrom operating activities - adjustment for noncash and non opearating items
Swapnil Jain
(Finance - FP&A)
(564 Points)
Replied 18 October 2011
| Originally posted by : Pawan Chaitanya | ||
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1. do not have a direct impact on current cash flows its a non cash transaction - should not be considered for the purpose of CFS 2. has to be considered in cash flowsfrom operating activities - adjustment for noncash and non opearating items |
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Pardon me to cross you Pawan...but as far as Point 1 is considered it is not a non cash transaction. As informed a part of preference share was reedemed by issue of equity shares...that's fine...no impact on cash flow (in net)...but for redemption out of profits surely the entry must have been:
Reserve a/c ...Dr
To Pref. Share Holder a/c
and
Preference Shareholder a/c
To Cash
I am not that good at cash flow brother.... please correct me if I m wrong... i was presenting my view over here!!
@ Puneet- if you can give complete details as to how much Prefernce capital was there and how much equity share are issued I can try and provide you with the figure (in case you need to confirm)
Thanks and Regards,
Swapnil
CAclubindia
