I know how to prepare CFS by Indirect method but do not know how to make CFS by Direct Method. Pl inform how to make Cash Flow Statement by Direct MEthod and what logic to be applied b/w differentiating both. Is there any change in format as per AS-3.
regards
shalini ahuja
The Difference between the two methods would be in calculating the cash flow from Operating Activities.I hope you understood the difference and both the methods are prescribed by AS 3 . But Indirect Method is more used.
Cash Flow from Operating Activities (two formats)
Direct Method
Indirect Method
Cash received from customers
Net Income before Taxes and Extra Ordinary Items
Less:Cash paid to suppliers
Adjustments to reconcile net income to net cash provided
Less: Cash paid to employees
by operating activities:
-Depreciation
Other cash operating expenditures
-Loss or Profit from Sale of Assets
Changes in other accounts
Net cash provided by operating
affecting operations:
activities
Less:Increase in Current Assets
Add: Decrease in Current Assets
Less:Decrease in Current Liabilities
Add: Payment Of Income Tax
Add: Any other Extra ordinary Items
Net cash provided by operating
activities
agree with manasa
Manasa has presented it well. The balance investing and financing activities is the same in both methods. And Salini, since ur confident with indirect method u neednt worry much because tats more difficult and more freq asked when compared 2 direct method
| Originally posted by :Hareesh H Sharma | ||
| " | Manasa has presented it well. The balance investing and financing activities is the same in both methods. And Salini, since ur confident with indirect method u neednt worry much because tats more difficult and more freq asked when compared 2 direct method | " |
Agree with you most questions cover only Indirect method but as it CA better u have a glance on the other method too..All the Best Shalini
I agree with manasa
Nice work manasa
wht is the treatment of interest on investments in cash flow satements under indirect menthod
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