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Earlier year tax in cash flow statement
How to show the same if we take profit before tax figure as starting point for cash flow?
Replies (4)
Show it as cash outgo on excess of provision made
Cash flow statement.
shows the following:
1. cash flows from operating activities
2. from investment activities.
3. from financing activities.
1. pbit
add back
depreciation
goodwill
amortised.
interest paid on short term and long term borrowings
less
Income tax paid....
shows the following:
1. cash flows from operating activities
2. from investment activities.
3. from financing activities.
1. pbit
add back
depreciation
goodwill
amortised.
interest paid on short term and long term borrowings
less
Income tax paid....
1. Cash flow statement will contain operating activity under which non-cash items that have already been added during the previous year now needed to be deducted because the same is paid during the year.
2. Simply the tax is paid during the year, so it must form part of your cash flow statement during the year.
Please correct me if the above solution has an alternative view.
How to prepare Cash Flow Statement (Complete Practical Guide) Click on below link
https://youtu.be/2i_culGgO8o
https://youtu.be/2i_culGgO8o
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